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Single-family housing accounts for more than 80 percent of total residential space. Over the last 60 years, the number of single-family homes in the United States has grown and the size of each home has increased, growing by about 40 percent between 1975 and 2010, according to the U.S. Census Bureau. “For the first time since World War II, the United States is experiencing increased levels of urbanization,” said senior research analyst Eric Bloom. “As more people move into cities, they tend to occupy apartments, condominiums, and other attached multi-unit housing types. By 2021, over one-fourth of the residential stock of the United States will be in multi-unit residential buildings.” Overall, according to the report, the U.S. residential building stock will grow from 264.3 billion square feet in 2011 to 280.1 billion square feet in 2021, expanding at a CAGR of 0.6 percent. Publication date: 9/10/2012

Opinion | Special assessments are a tax by another name Michigan’s city managers, county executives and others entrusted with delivering government services know the lesson all too well: Property tax revenues in our state can fall quickly, and have – the financial crisis and subsequent real-estate collapse of 2008-09 drained dollars from public coffers, leading to cuts in services, layoffs of city workers and urgent pleas for voters to approve Headlee overrides at election time. It also led to the wider embrace of a local-unit financing tool that most taxpayers have never heard of, although they may well be paying them – the special assessment. When the Citizens Research Council started looking at this issue in the 1980s, only about 5 percent of the local governments were using this finance tool. Our new paper found that in 2018, 11 percent of local governments - mostly townships, but also a few villages and small cities - were funding services this way. Special assessments were originally conceived in British common law. It recognizes that when a city, village or township cuts a new road, builds a dam, installs sidewalks or invests in street lighting or drains, some properties will benefit from those projects more than others. Special assessments are used as a means of recovering the cost of these infrastructure improvements by apportioning at least a share of the cost among those benefiting properties. Special assessments differ from traditional property taxes, or should. We are taxed on the value of our land and buildings to provide services to the general public – police and fire, libraries, parks, and garbage collection. But in 1951, state law changed to allow special assessments to be levied far more broadly, to all properties in a taxing district, and allowed them to be used to pay for the most basic of local government services: police and fire protection. It’s easy to see why so many local units of government have turned to the special assessment, with that permission granted. Public safety is among the most expensive service provided by government, and the one residents are least likely to agree to cutbacks in. When tax revenues fell, the costs could be made up with special-assessment collections. Why is this important? Michigan has restrictions on property taxes, to save owners from being taxed out of their homes. There are limits on the tax rates each type of government may levy. Voter approval is required to levy new ones. The Headlee Amendment to the state constitution requires tax rates to be “rolled back” if property values increase faster than the rate of inflation. These provisions do not apply to these property value-based special assessments. In fact, many townships and cities are using special assessments to tax at rates higher than they could if they were using the property tax. State law limits charter townships to 10 mills of taxation, but Canton Township in Wayne County is able to levy 12.3 mills (2.8 mills of property tax and 9.5 mills of special assessment). Carrollton Township in Saginaw County is able to levy 12.8634 mills (0.9134 mills and 11.95 mills). And Kalamazoo Township in Kalamazoo County levies 12.4812 mills (8.9412 mills and 3.54 mills). We understand the difficulties faced by officials struggling to maintain services, but taxation by a different name is not a solution. We think the legislature should eliminate these unit-wide property value-based special assessments, and go back to their original use and intent – for infrastructure, not general services, and for discrete areas, not the entire taxing unit. Public safety, of course, is an essential service that cannot just be eliminated, and many special assessments are currently funding them. Our alternative: The establishment of emergency service authorities. These are multi-jurisdictional governments authorized to levy taxes, but in accordance with constitutional limitations and state law. Michigan’s municipal finance system is broken. When starved for resources, local governments are left to adopt bad policies. This is in no one’s best interest. Local-option taxes should be considered to supplement and replace property taxes, including sales or excise, income, transportation, “sin,” or other specific taxes. Additionally, the state and local governments should take a serious look at the entire municipal-finance and service-delivery system, which has not changed much since the 1800s. It is now the 21st century; transportation, communication and technology are vastly different now. Our governance should reflect that. We’ve been there for you with daily Michigan COVID-19 news; reporting on the emergence of the virus, daily numbers with our tracker and dashboard, exploding unemployment, and we finally were able to report on mass vaccine distribution. We report because the news impacts all of us. Will you please donate and help us reach our goal of 15,000 members in 2021?

Long ago, most Americans lived as Laura Ingalls Wilder chronicled in the “Little House” series. Pa Ingalls and family were out in the wilderness, surviving with the rhythm of the land and putting away what they could to survive long winters and perhaps beyond. The family’s net worth was what they had around them – nearly all put toward surviving on their own. That life has been replaced with interdependence based on a dollar value assigned to absolutely everything. We all get by with any extra scratch, should there be some, not stored up to get through the winter but properly invested in convertible assets. This means that everyone is subject to the values of the Free Market™, which determines the value of all assets including experience, talent, and work. The real lessons from successful financial companies like Bain Capital are the demonstration of what these values of interdependence are – and how our world far beyond Pa Ingalls has become as hostile as any winter on the Great Plains. Out on the late 19th Century frontier what it took to survive was something a bit more than hard work and a diverse collection of skills. It was essential to build up resiliency, a store of food and fuel and just enough gunpowder to hunt for fresh meat. The exact amounts were determined by the seasons and the nature of the land itself, and reading the signs given by the land was a critical skill. Life in cities at that time was essentially not that different, though it depended on the vagaries of social interaction more than the cycle of seasons. Big companies kept a few months’ payroll on hand in cash and tried to be self-insuring, taking a very long view of their development, image, and relationships with customers and suppliers. Shocks might come through the market but big industrial firms were reliable, steady institutions. This concept remained more or less intact as long as the USofA was a manufacturing nation. This all changed around 1980 as cheap capital made stores of supplies or money salted away to get through the rhythms of life look very expensive. It seems contradictory, but the concept is critical. And that brings us to companies like Bain Capital. When capital becomes cheap through a concerted “Supply Side” effort that includes subsidy and socialized risk, a funny thing happens to stagnant “working capital” salted away to cover the ups and downs of the market – it starts to look just like ordinary cash flow. It makes companies that have a lot on hand look “troubled”, at least in the sense that they are not leveraging their assets with Other People’s Money (OPM) to the maximum possible return. I couldn’t say it any better than this: “Troubled” companies have a particular meaning on Wall Street. Sure, sometimes they refer to companies that are just muddled, have over-expanded, and are badly managed. But more often, what they are talking about is companies that do not seem to providing a large enough return to shareholders—a stagnating stock price in particular. But that does not mean a company is “troubled.” It can be quite profitable, have productive and loyal employees, have satisfied customers, and cash on hand. What players like Bain do is enforce a Wall Street preference. There is a bias against companies that seek a “quiet life.” They are shunned by institutional investors, which depresses stock prices and makes these companies “troubled” in the first place. It isn’t that they are not profitable, but rather than institutional investors don’t like them, and as a result they trade at dramatically lower P/E ratios. Indeed, it isn’t even clear that takeover targets do have weaker stock performance if you look at total returns, including dividends. This is how resiliency, or the ability to survive ups and downs independent of the vagaries of capital markets, becomes the ultimate casualty of “Supply Side” policies geared towards developing cheap money. And interestingly, one of the great champions of this system and its queer values of high dependence on an international finance system has the endorsement of a major party to become our President. His record is outlined very well in this piece from Bloomberg: What’s clear from a review of the public record during his management of the private-equity firm Bain Capital from 1985 to 1999 is that Romney was fabulously successful in generating high returns for its investors. He did so, in large part, through heavy use of tax-deductible debt, usually to finance outsized dividends for the firm’s partners and investors. When some of the investments went bad, workers and creditors felt most of the pain. Romney privatized the gains and socialized the losses. Like any social agreement, the economy we have is subject to beliefs, fashion, and political philosophy. The current system we all operate under is fueled by easy debt developed by low capital gains rates, under-regulated banking, and a general belief that idle assets are wasted assets. But these are not the same values that made the nation we live in. These are not the values of people like Pa Ingalls, who valued independence and resiliency. What we are ruled by are values that make us dependent on each other, all around the world, far more than we could ever imagine. The storms that cross the oceans to challenge our survival are not biting cold or sweltering drought, but man-made disasters created by people with values that we often understand less than the rhythms of nature herself. This system is one we created. We made it happen by making people like Mitt Romney fabulously wealthy for destroying the values that created our nation, thus creating even more people operating his way. The irony that he is running as a Republican and an advocate of “conservative values” that include personal liberty requires a very deep cynicism to appreciate fully. Pa Ingalls, for his part, would almost certainly be appalled. And that’s worth thinking about.

USA rethinks fisheries management - Fisheries in the USA are managed under the Magnuson Fishery Conservation and Management Act of 1976 (MFCMA). By 1991, it was reported that fish stocks had declined considerably since the act came into force. A national Committee in Fisheries was set up in 1992 to investigate ways of improving fisheries management regimes. The committee's seven recommendations framed in four broad areas are: (1) prevent overfishing; (2) improve the institutional structure; (3) improve the quality of fishery science and data; and (4) move toward an ecosystem approach to fishery management. These recommendations are designed to enchance the most effective aspects of the present MFCMA and to introduce critically needed clarifications and structured improvements. - Journal Article

February 17, 2018 6 min. read Lets first take a step back, discuss the concept of metaphors itself and why they are important. The human brain is composed of a large neural network. Neural networks are basically association machines. They constantly match new input against already known patterns, look for similarities and update/refine existing patterns. This happens with a bias to stick as closely as possible to existing patterns, because building them is hard work and evolution has optimized for energy efficiency — with the side effects of making us susceptible to all kinds of cognitive biases and of making us suffer of cognitive dissonance when the mismatch grows too large. Whenever new input significantly updates/alters our stored patterns, we refer to this as learning. In order to dive deeper into that topic, I recommend a look at the works of Jean Piaget. Metaphors are essential for humans to bridge knowledge gaps. In the times of Galileo Galilei it may have been possible for individual brains to accumulate most of the existing knowledge. That times have long passed, making metaphors essential for navigating the world. The rapid advancement of Information Technology and the inability of most education systems to keep up have created a serious gap of common understanding even on the level of metaphors. As a result, modern technology is often not only perceived as, but also marketed as magic, ina way regressing us back into a pre-enlightenment state where understanding is replaced by myths and believes. Historically, coins have played a central role (although by far not being the only form of money before paper — see The Origins of Money by Nick Szabo) in forming our understanding of the concept of money. For a long time, the value of a coin corresponded to the value of the material it was composed of — usually gold or silver. It’s worth noting that techniques to inflate the monetary base — leading to the Cantillon Effect — already existed and were frequently employed (e.g. by applying excessive Seignorage). Fiat money isn’t a prerequisite for that, it just makes it easier to obscure the inflation. Over time, coins tended to become more standardized, making the handling of them more convenient (no need to weight individual coins). However the fixed denominations — usually multiples of 1, 2 and 5 — as we’re used to today — are a pretty recent development, closely related to the switching to Fiat money. As the name suggests, the account model has a notion of accounts which have balances. Despite of that, it has become common to refer to their units of account (e.g. Ether) as coins (or altcoins) anyway, adding to the confusion. Originally, the coin metaphor is closely related to the UTXO model, thus the following observations will focus on how the metaphor fits for that. Crypto coins usually don’t come in fixed denominations as we’re used to. In the UTXO model it is possible to design crypto coins with similar fixed denominations (see e.g. Chapter 26 of the Byteball Whitepaper), but in general it’s not an efficient way to implement crypto-currency this way and thus rarely done. A coin in Bitcoin could have any denomination between 0.00000001 and 21000000 (at least in theory). When transacting a crypto coin, the receiver is defined by an address. The concept of address suggests that we’re talking about some kind of identifier which is associated to a human or a human’s persona/role — like an Email address. In the context of a payment system, we’re tempted to relate such an address to the concept of a bank account (which works pretty well in the account model). A Bitcoin address is a strange animal. It expects to be used only once (which isn’t enforced) and is related to the coin metaphor in a complicated way: Whenever the value of one or more coins (inputs) is transacted to an address, a new coin (more technically, an unspent transaction output aka UTXO) is created. A Bitcoin address encodes a set of rules which govern how and under what circumstances a coin can be spent. While this is typically just a check of private key ownership (see P2PKH address), it could also be something much more complicated (e.g. temporal restrictions — whatever one can build with Bitcoin script, typically implemented with P2SH addresses). The point is: the semantics of an address in Bitcoin and other UTXO systems goes way beyond what the address metaphor can communicate. Coins can be spent. In the analog world, that happens by taking specific coins out of the pocket and handing them over to somebody (or to a machine). Ownership change here is reflected by changing the physical location. Crypto coins have no physical location. Spending a coin (an UTXO/unspent transaction output) happens by creating a transaction message containing a cryptographic signature which proves that the sender knows the secret required to spend that specific coin. This transaction message is then broadcast to a P2P network and hopefully included in a block by a miner. Once that transaction was mined, the sent coin ceases to exist. Its value was moved to one or more new coins created by that transaction. There is however a second way to transfer ownership of crypto coins which more closely resembles transacting with analog coins: Instead of transacting on-chain, the secret (private key) needed to spend a coin can be transferred. This requires that this secret was not revealed to the prior owner (or anybody else). This is typically implemented by some kind of physical object — often resembling traditional physical coins (examples) — containing the secret such that revealing it invalidates the object in a visually obvious way (basically, protected by a physical seal). Implemented such, crypto coins can indeed be transferred the “old way”, but such off-chain transactions inherit the limitations of non-crypto physical coins like not allowing partial spending and being constrained by the physical location. Also, such physical crypto coins require trust that whoever created them in the first place didn’t keep a copy of the secret. Overall, this properties and the variations they allow make it difficult to understand the concept of ownership and how it can be transferred, where the digital asset is stored, how it is represented etc. That’s probably were the limitations of the coin metaphor are most obvious. Lastly, a look at the property of scarcity — a prerequisite for being money. The second most important metaphor introduced by Bitcoin was that of Gold for explaining its scarcity. Gold derives its scarcity from a physical limitation. There’s only so much of it and getting hold of it is expensive (for now). Lets assume the supply of Bitcoins were also physically limited. Even so, the Gold metaphor wouldn’t really hold, because the total all-time supply of Gold is unknown, because its supply curve doesn’t really resemble that of Bitcoin & Co and because the production (that is, inflation) of Gold is influenced by its market value (Bitcoin sticks to a pre-determined inflation schedule by continually adapting the difficulty to the network hashrate). I would instead claim that Bitcoin & Co derive their scarcity from a social contract, implemented as an Internet protocol. Unlike with Fiat money, fidelity to this contract does not rely on a central governing institution, but on the network itself (the exact meaning of which is still disputed). Furthermore, crytoeconomic systems usually (there are exceptions) allow easy and exact verification of this contract at any time and allow networks to partition in case of disagreement. E.g. if half of the Bitcoin network (however you measure that) decided they wanted to increase money supply from 21 to 42 Million units (e.g. because 42 is the answer to everything), they could do so without forcing the other half to accept that — there may however be a dispute about which one is the real Bitcoin (as seen before). Despite of this limitations, the early introduction and successive repetition of the Gold metaphor created a strong inter-subjective reality — reinforced by the metaphor of mining — around the notion that the scarcity property of crypto coins is somehow more similar to that of Gold than to that of Fiat money. As long as this believe has broad enough consensus, this metaphor will keep working and protect crypto currencies against inflation. It does however not protect them against a new kind of inflation, lets say meta-inflation: while the number of precious metals suited to become money is quite limited (see bimetallism), the same is not true for crypto-currencies. We’ve yet to see how this plays out in the long term. Metaphors are important! They create a cognitive interface to new concepts. Metaphors can do more harm than good when they create leaky abstractions, when users interacting with a system based on intuitions related to deployed metaphors are likely to make mistakes. In order to minimize such mistakes, we can’t just blame users for not understanding technical details. User interfaces hiding details shouldn’t just be easy to use, they should also be safe to operate for users acting according to their understanding of employed metaphors. If new concepts don’t fit potential metaphors well enough, it may be better to introduce new terminology, making the requirement of learning something new more explicit.

CASSE’s GDP Meter —the first of its kind on the internet— is a real-time, rolling, 12-month global GDP estimate. About the Data: The fundamental identity of national income accounting is: Production = Income = Expenditure National income, expressed as GDP, represents the level of economic activity in the aggregate during a given period of time. Growing GDP reflects a growing population × per capita consumption. In the vast majority of applications, the period of time for GDP reporting is one calendar year. The CASSE GDP Meter was initiated on June 27, 2019, at which time a global GDP estimate was extrapolated from the latest (2017) World Bank calculation of global GDP. The extrapolation rate was equal to the GDP growth rate for the period 2012-2017, or 1.59%/year. CASSE IT interns developed a database of extrapolated real-time estimates for every remaining second of 2019, as well as a program to populate the online meter with these estimates. The meter is based on the estimated increase per tenth of a second for every second of the day. The GDP growth database is updated each year following World Bank updating of global GDP estimates. World Bank GDP estimates are available at The World Bank website. Inquiries about the CASSE GDP Meter may be emailed to firstname.lastname@example.org. This page contains technical information about the GDP meter. To learn more about the meter’s development and leave a comment, see Brian Czech’s explainer, “Be Very Alarmed!” Introducing the Global GDP Meter. Coal mine in Jahria, India — TripodStories- AB, CC BY-SA 4.0 | Deepwater Horizon oil spill in 2010 — Kris Krüg, CC BY-SA 2.0 | Industrial forest management, Olympic Peninsula, Washington — Sam Beebe, CC BY-SA 2.0 | Empty watering hole during drought at Walnut Creek Ranch, CA in 2014 — USDA photo by Cynthia Mendoza, CC BY-SA 4.0 | Loss of white collar jobs — Adobe Stock Image | Workers in a rubbish dump — Adobe Stock Image | San Diego-Tijuana border — U.S. Army photo by Gordon Hyde | Syrian refugee from Deir Ezzor arrives in Greece — Public Domain | Indian & Pakistani security forces at the Wagah border — Gargisharma13, CC BY-SA 4.0 | South Ossetia War 2008 — Yana Amelina, CC BY-SA 3.0 | Counterterrorism drills in the Arabian Peninsula in 2017 — U.S. Army photo by Timothy Lawn | Clashes in Kyiv, Ukraine, February 18, 2014 — Mstyslav Chernov/Unframe, CC BY-SA 3.0.

- Tourism is about 3% of Australia’s GDP; - Intra-state travel is most important, particularly for the four most populous states; - Domestic spending by Australians not going overseas won’t make up for the loss of international visitors; - The power of the economic recovery and the path of the virus will determine how quick the tourism sector recovers. “Up, up and away” was a song written in the 1960’s by Jimmy Webb that reached number one in Australia and Canada (and number 7 in the US). It was obviously a big song. But its place in popular culture was cemented when the airline TAA (anyone remember them) used it as their marketing jingle in the 1970s. That was a time when the high cost of fares meant that air travel was an unusual event for most people. Getting on a plane (or train or car) to visit other places has again become unusual, although this time it has nothing to with fares. Perhaps it is because we are an island but the first image most have of tourism is getting on a plane and heading to some exotic overseas locale. But Victorians escaping a dreary winter to sunny Queensland are also tourists. As is the city-dweller who heads out to the country for a weekend. Indeed, domestic tourism in Australia is by some distance ‘bigger’ than international tourism by both the number of visitors and total spend (international tourists though spend more per day). The ‘tourism industry’ actually comprises a wide range of sectors that also provide goods and services to the locals. The ABS deems that a bit over half of all sectors in the economy earn at least some dollars from tourism. And some they exclude (such as finance and utilities) almost certainly do too. The accommodation and food services, transport and recreational sectors are particularly impacted by tourism. Some states rely on tourism more than others. As would be expected tourism is a bigger part of the Queensland economy than it is for WA. But it is actually most important to the Tasmanian and Northern Territory economies. The source of visitors also varies. Intrastate tourism is particularly important in WA (and why they are less impacted by the closure of state borders). The NT has a higher weighting towards interstate tourism, Tasmania and South Australia towards international tourists. Tourist venues are often in pretty places, and can seem (at least from the outside) to be a dream business. But it can get very busy during peak times. And financially it can be tough. Profit margins for the food and accommodation sector are on average about two thirds of that in the wider economy. And over the past three years the proportion of firms in that sector making a loss was about twice that across all industries. Tourism is currently about 3% of the total size of the economy, although it was a little less than that when the economic going was tougher during the GFC. By global standards Australia’s tourism industry is not an unusually large part of the economy (and only slightly bigger than the size of the US industry). It is more important for some developing countries (reflecting cheap food and accommodation, and the lack of development of other industries) or Europe (ease of travel to other high-income countries). Tourism is less important for China or Japan. The social distancing policies have hit the tourism industry hard. A recent ABS survey indicated that the two sectors with the largest number of job losses since the quarantining started have been accommodation/food services and recreation. The pace of the recovery for the tourism sector will in the first instance be determined by the ending of the social distancing policies. Intrastate travel is already opening up in most states, and will likely to be fully so across all states by end-June (barring no widespread infection breakout). The opening up of interstate travel will take longer. The Federal Government has suggested an aspirational date of the start of July. But a number of states are taking a more cautious approach. There has been suggestions that the border could at first be opened up between the less populated states, and then in time be extended to NSW and Victoria. At this stage it seems probable that inter-state travel will be running with few restrictions by end-September. International travel will take longer still. It looks very likely that Australia and New Zealand will be in the same ‘travel bubble’ by year-end. There has been talk of extending that to the Pacific Islands, although that will take longer. Next the ‘bubble’ will likely be enlarged to encompass other countries that have got on top of virus (such as South Korea or Vietnam). ‘Bubbles’ (or ‘travel corridors’) are already opening in other parts of the world. There is one already amongst the Baltic countries (Lithuania, Estonia and Latvia). The Scandinavian countries are talking about another (although they look like excluding Sweden). South Korea and China are looking to create a fast lane for business travellers that would involve no quarantining of arrivals. Europe is slowly re-opening its internal country borders. It will be interesting to see how long they can keep the borders open given the differing new case path amongst countries. Differences between how countries have handled the crisis will limit international travel until a vaccine or treatment becomes widely available. Travel to and from emerging markets could be particularly crimped given their lower testing and tracing capability, and the generally poorer state of their health systems. The United Nations World Travel Organisation (UNWTO) thinks that global travel will fall 60-80% this year. Almost 40% of the panel of experts to the UNWTO thinks a tourism recovery won’t begin until next year. A full recovery of international travel might be three years away. This means that the tourism industry will have greater reliance on the domestic market. Getting travel within the state going will be a big first step (particularly in WA). The dollars that Australian’s spend holidaying at home instead of offshore will be very helpful. But it won’t fully compensate for the large reduction in overseas travellers. There is a lot of focus on China. It is a very important tourism market for Australia, and will remain so once the COVID crisis passes. But even before the advent of the virus the number of Chinese tourists coming to Australia was starting to slow. Mostly that reflected a weakening of the Chinese economy (Australia’s market share of Chinese tourism has been broadly unchanged). India is becoming increasingly important (and would have been even more so later this year with the arrival of the Indian cricket team). New Zealand is likely to again be Australia’s most important source of travellers over the next year. Even when social distancing restrictions are fully removed the industry will face both supply and demand constraints. The economic fallout from COVID has hit airlines pretty hard. Stronger airlines (such as Qantas) can add back capacity quickly once signs of demand returns. But overall capacity might be lost for a time as airlines initially concentrate upon the most profitable routes at the most profitable times. That was the case in Australia in 2001, when airline passenger movements flat lined for a couple of years following the collapse of Ansett (although a weaker Australian economy and September 11 also played a role). Even more important is the economic outlook. A sustained weak economy would set back any tourism recovery. Consumer confidence has recovered in recent weeks although it remains well below ‘normal’. The underutilisation rate is currently close to 20%, a record high. The RBA is forecasting an unemployment rate of 7.5% by end-2021. The good news though is that high-income earners (who comprise about 40% of all spending by households on tourism) are still likely to take a holiday. Indeed, the top 60% of income earners account for around 80% of all holiday spending. And the forced time at home will mean more than a few will want to go and explore ‘the wide outdoors’. What can firms do during the quiet period (apart from hoping to survive until things pickup). Tourism firms have historically marketed themselves well on both social media and the internet. But they could do better at using the internet to make or receive orders. Doing so would improve efficiency and could lead to increased revenue growth. But it could also involve some IT investment dollars that may be hard to come by for cash-strapped firms. A less expensive task would be to incorporate benchmarking within their business on a more widespread basis. A survey by the ABS indicated that less than half of the firms in the accommodation and food services sector were major users of a range of benchmarks. Extensive use of HR was particularly low. Over the longer term, tourism remains an attractive industry. The desire to travel increases with incomes, and the domestic and global economy will grow again. Australia’s aging population means there is a large group of retired people with both wealth and time on their hands. Before we know it we will have returned back to the days when the discussion was whether tourism had reached over capacity in some of the most popular spots! TAA was an Australian airline that was bought by Qantas in the early 1990s. That was our last very deep economic recession, when airlines (and the wider tourism sector) was struggling. This is also a very tough time. But the sector will re-emerge to eventually be in a bigger and stronger shape. We live in interesting times! Peter Munckton - Chief Economist

In spite of the fact that they don’t get much attention in basic economics classes, we live in a world where we are subject to auctions almost constantly. It’s not just getting something on eBay or other auction sites, but it’s how many things are distributed in the public sphere. You can sell Google articles on bandwidth auctions, as one example in the real world. The ads you see on Google are the result of a constant stream of small auctions. Likewise, the automatic price changes for books on Amazon resulted in a computer-driven price of $2,198,177.95 for one book as two robots tried to outbid each other. An auction depends on bids and a market: - Not everyone values things the same. A lobster dinner looks good to me, but deadly to someone with a shellfish allergy. That final copy of The Flash #123 will complete my comic book collection, so despite being valuable in itself, that comic book has special value to me as a collector. - Personal valuations change over time. I might eat a second lobster dinner immediately after the first one, but a third lobster is too much to eat right now. Call me next week, please. - People do not trade unless they feel what they gain is more valuable than what they lose. I want that lobster dinner more than I want the $25 in my pocket. But I want $50 in my pocket more than a lobster in my belly. If I find out I bought crayfish and not lobster, I feel cheated and regret my purchase. This is called buyer’s remorse. - Auction Theory 101 disallows something that happens in the real world: collusion. Groups of buyers can get together and agree to restrict their bids in some way that’s advantageous to them. The versions of auctions that are taught in economics classes start with the assumption that everyone is making a bid based on their accurate evaluation. Your Auction Theory 102 class will go into game theory and how to collude properly. Bids have to stop at some point in time, so there is usually a deadline. There can be sealed-bids, where each bidder has a fixed number of bids (usually one) that they traditionally submit in an envelope. Open bid auctions are more lively; the bidders call out their offers until the auctioneer closes the bidding. You can enter and leave the auction at will. These days, bidders do it online with bid snatcher software that automatically submits a bid that is under a pre-set limit. The usual strategy is to wait until the last possible minute (one second? micro-second? nano-second?) to get in a bid in so short a time slot that no human can type fast enough to beat you. Types of Auctions Auctions come in all kinds of flavors, but the basic parts are an offering of something (“I have here a mint-condition first edition of CAPTAIN BILLY’S WHIZBANG, 1919! I start the bidding at $500!”) and bids (“I’ll offer $750 for it. But I would pay up to $1000 for it; maybe I will get lucky!”). The bid can be accepted or rejected. If the bid is accepted, the item changes ownership. Now I get in some strategy here. Should I start with a very low bid and see if I get lucky? Should I start with a medium bid to discourage other bidders? Should I say to heck with it and just throw out my best offer first? The least interactive auction is the first price sealed bid. The bidders submit sealed bids to the auctioneer, and then the auctioneer opens the bids and picks the winner. This form of auction is used for construction contracting, some military procurement, private-firm procurement, refinancing credit, foreign exchange, and many other goods. The bids are usually complicated things in which the bidder offers to fulfill a contract of some sort in detail. If you’re a Star Trek fan, then this “take it or leave it” approach is how Klingons do business. If you are making a deal with a Klingon, you either drink blood-wine together or shoot it out! Broadly speaking, there are two styles of processing bids; ascending price (English) and descending price (Dutch). English Auctions are also known as increasing or ascending price auctions. The auctioneer asks for a starting price, and the bidders increase the price until the item sells or the price offered is not high enough to meet a minimum bid, and the auction fails. This is the form that most of us know. It is how eBay works. Sort of. eBay is more complicated. Dutch Auctions are also known as descending price auctions. The auctioneer asks for a high starting price, then drops the price lower and lower in steps until the item clears or the auction fails. This form of auction was popular with small retail stores in small American towns in the early 1900s. The items would be placed in the store window with a flip-chart price tag and an announcement that the price would decrease a certain predictable amount, say $1.00, per day until sold. Today, the Dutch auction is hidden in online clearance sales. Instead of looking at the store window on Main street, you get a series of email advertisements at lower and lower prices. There are various forms of both categories. The Japanese auction is an ascending price auction with levels or tiers. Once you drop out, you cannot re-enter the bidding. For example, if the starting bid is $10, every interested bidder agrees to meet it. They may be required to show that they have at least that much money available, should they win. The auctioneer will then go up a level, say $15; anyone who fails to meet the new level is out and cannot re-enter the bidding, even if they are willing to pay a higher price later. You have a lot of information – the number of other bidders at every level and their exit prices. The auction continues until only one bidder remains. Obviously, a winner can have buyer’s remorse – the feeling that they paid too much for the item. If you have seen bidding wars on eBay or in real life, you understand how emotions can get mixed up in the heat of the moment. The solution is Vickrey or second-price auctions. The highest bidder wins, but the price paid is either the second-highest bid or a price between the highest and second-highest bids. The winner cannot be unhappy; he paid less than his bid and won. The losers cannot be unhappy; they all bid less than the winner. The eBay proxy bid system is a form of second-price auction. A variant of a Vickrey auction, named generalized second-price auction is used in Google’s and Yahoo!’s online advertisement programs. The computer runs hundreds or thousands of auctions for the on-line adverting slots they sell. The auctioneer will probably like the idea of a bid between the highest and second-highest bids since it results in a little more profit. Auction Database Schema What should the skeleton of a database schema for a general auction look like? Let’s start with the bidders and a simple skeleton. CREATE TABLE Bidders (bidder_id INTEGER NOT NULL PRIMARY KEY, When logging in an item for an auction, you need to identify the item and get a starting bid amount. The minimum bid is also called the reserve amount. If there is no bid, equal to or greater than that amount, the auction is void. CREATE TABLE Items (item_id CHAR(15) NOT NULL PRIMARY KEY, item_name VARCHAR(25) NOT NULL, initial_bid_amt DECIMAL (12,2) NOT NULL CHECK(initial_bid_amt >= 0.00), minimum_bid_amt DECIMAL (12,2) NOT NULL CHECK(minimum_bid_amt >= 0.00)); A bid must be timestamped, and the bid amounts have to increase over time. CREATE TABLE Bids (item_id CHAR(15) NOT NULL REFERENCES Items (item_id) ON DELETE CASCADE,bidder_id INTEGER NOT NULL REFERENCES Bidders (bidder_id), bid_timestamp TIMESTAMP(0) DEFAULT CURRENT_TIMESTAMP NOT NULL, bid_amt DECIMAL (12,2) NOT NULL CHECK(bid_amt >= 0.00), PRIMARY KEY (item_id, bidder_id, bid_timestamp) An item can be pulled from the auction, so the DDL should cascade and remove the bids when that happens. A bid can be pulled from the Bids table, but you have an auction as long as there’s at least one bid left the system. Auctions are good for everyone because: 1) the seller gets compensation for something he might have otherwise discarded. 2) the buyer receives something he wants for the price that he’s agreed upon. 3) the item is assigned to the buyer who objectively wants it the most, and therefore you can assume this is the optimal use of the item. Another allocation method would be by a raffle among the bidders. This might work if the sale of raffle tickets gives the seller a return equal to or in excess of the item’s value. However, for the economy as a whole, there’s no guarantee the item will wind up with the person who wants it the most. Everyone who has failed to win the lottery resents the winners and is dissatisfied with the fact that they didn’t get the prize. I’ve never quite figured out why anyone would think the universe owes them a winning lottery ticket, but a lot of people do. Fair Division by Auction So far, I’ve talked about using an auction to get a buyer and a seller together with one item. However, this technique is much more general. Imagine that Uncle Scrooge McDuck has died and left his estate to his heirs. Some of his estate is in the form of money, which is pretty easy to divide up, and several goods which cannot be split up. Unfortunately, one solution is to sell everything and then make sure that the entire estate is expressed in money. This is unfortunate because the heirs might actually want to keep something without having to monetize it. We need a different procedure. The Knaster Inheritance Procedure (KIP) is named after Bronislaw Knaster. This is an auction scheme designed for an estate with many heirs, assuming that each heir has a large amount of cash at their disposal. The basic idea is that you auction all of the indivisible property in the estate to the heirs (bidders) and then adjust what the heirs think is a fair value. This is easier to see with an actual example. Suppose that Huey, Louie, Dewey and Donald are splitting up a house, a cabin, and a boat. You get bonus points if you know the actual names of Donald Duck’s nephews (spoiler: Dewey is actually “Deuteronomy”). They then give bids for each item, as shown below. To divide up more than one item using the Knaster Inheritance procedure, you include two more rows: Total Value and Fair Share. The total value is the sum of that person’s bids, and the fair share is the percentage multiple of the total value. In this example, Huey’s total value = $210,000. His fair share is $210,000 × 0.25 = $52,500. Each item is given to the person with the highest bid, shown by ** in the chart. Louie gets the house, Dewey gets the cabin, and Huey gets the boat. Poor old Uncle Donald gets nothing. Here’s where the fair share comes into play. Remember that each person expects to get their fair share. Consider them one by one. - Huey gets the boat, which he valued at $30,000. Since his fair share is $52,500, he then expects the difference in cash: $22,500. - Louie gets the house, which he valued at $200,000. Notice that his fair share is lower than what he valued the house for. Thus, he expects to pay back the difference, which is $134,000. - Dewey gets the cabin, which he valued at $90,000. Again, this is higher than His fair share, so he expects to pay back the difference: $27,500. - Donald receives no property because he didn’t win any of the bids. Thus, he expects to get his fair share in cash: $62,500. At this point, all four participants are getting what they believe is their fair share. Notice that Louie and Dewey contribute to the kitty, while Huey and Donald are awarded money from it. Thus, our surplus is $134,000 + $27,500 − $22,500 − $62,500 = $76,500. This will then be divided among the four. Therefore, each duck gets an additional $76,500 × 0.25 = $19,125. Thus, the final outcomes are: - Huey gets the boat, $22,500 for the fair share adjustment, and $19,125 from the surplus. - Louie gets the house and $19,125 from the surplus. He also has to pay $134,000 for the fair share adjustment. - Dewey gets the cabin and $19,125 from the surplus. He also has to pay $27,500 for the fair share adjustment. - Donald receives his fair share of $62,500 and $19,125 from the surplus. In fairness, these calculations are probably better done with the spreadsheet than in a database. There are trade-offs with this procedure. On the good side, it can be extended to any number of items among any number of participants. Bids are done in secret and only once. The downside is that the amount of money involved can get pretty big. It’s also possible that one bidder who is willing to pay enough to beat everybody else, he can inherit everything. This might not be a downside if only one of the heirs to the estate really cares about the property and everybody else is just in it for the money. The seller wants to get the highest price for his goods, obviously. The fact or illusion of competition works in his favor, so the seller has an incentive to have shills bid up the price. At English auctions, the auctioneer himself pretends to hear bids (his incentive is that he gets paid by a percentage of sales); this is sometimes referred to as chandelier or rafter bids. Then there is the outright shill bid. You get your fellow co-conspirator to bid on the item, even though they have no intention of buying it. One way to discourage shill bidding is to set a reserve price, so the seller is guaranteed a guaranteed minimum return. Another way is to detect shills is through the bid patterns. Typically, the shill increments the price by only small amounts, so as not to discourage a genuinely interested bidder from staying in the auction. The auction rules can require a minimum bid increment to discourage this behavior. Another way to cheat is just outright collusion. The bidders get together before the auction and decide what the price will be. This has been done in several high-profile government auctions and was part of the storyline in John Steinbeck’s “The Pearl” short story. The Bottom Line Honesty seems to be the best general strategy. Do not overbid what you think the item is worth to you. If you pay your evaluation of the item, then you just made a routine purchase. If you pay less than your assessment, then you got a bonus. If you lose, then you still have your money.

Co-regulation: “Fashion or effective tool for the sustainability of global biomass supply chains?” Environmental and socio-economic concerns around biofuels production are especially discussed for feedstock originating from countries where the risk of non-compliance is high. Assuring the sustainability of biofuels requires therefore that feedstock production and trade occur under the frame of regulation and control mechanisms that can be enforced on an international level. The European Renewable Energy Directive (RED) allows economic operators in the European Union (EU) to use private sustainability certification schemes to prove compliance with mandatory sustainability criteria for biofuels and other bioliquids Directive. This concept of combining public regulation and private initiatives is referred to as co-regulation. The European Commission (EC) implements co-regulation under the RED via the recognition of private sustainability certification schemes. Co-regulation builds upon the combined strengths of public regulation and private initiatives. Strengths in public regulation include democratic legitimacy, applicability to all firms within the jurisdiction, and enforceability through national supervisory agencies. Weaknesses include slow development, no applicability outside the national jurisdiction and often high implementation costs for private sector parties. Private initiatives are often flexible, quick and innovative in nature; they may have an international focus and can be applied across national boundaries. While the recognition of private schemes in public regulation has the potential to combine the strength of both regulatory areas, there are also risks attached to the process. Lack of clarity and guidance during the implementation of co-regulation may end up in some weak private initiatives combined with lenient national regulation, resulting in high environmental or socio-economic concerns. Contradictory demands on private initiatives by different governments may increase implementation costs. Furthermore, if the dynamics of private initiatives is not fully understood, then co-regulation may not be efficient or it may be used in a way that endangers its neutrality and credibility (e.g. for protectionist purposes). The risks involved in co-regulation, make it evident that careful design, implementation and constant monitoring of such processes are needed to secure their effectiveness. This article discusses the experience of the current EU co-regulation process and lays out the lessons learned and recommendations to overcome the weaknesses detected. EU co-regulation and the use of private sustainability certification schemes The co-regulation process in the EU is rather new. It started in 2011, and has undergone since then a steep learning curve. By November 2012, thirteen private certification schemes have been recognised by the European Commission (EC). The scope and assurance level of these recognised certification schemes is heterogeneous. Issues like accreditation, sampling requirements, level of verification, stakeholder consultation, complaints procedures, transparency and recognition of other recognised schemes, are not mentioned in the RED as requirements for recognition, or are only generally defined. This results in a variation in assurance requirements between schemes for those points where the RED lacks guidance or leaves room for interpretation. The EC is required under this co-regulation process, to assess the effectiveness and operation of recognised private sustainability certification schemes. This assessment gains importance as the share of certified biofuels used in the EU is constantly increasing along with national implementations of RED in Member States. Recent research done by SQ Consult shows that by the end of 2012, about 81% of certificates were issued within the EU where sustainability risk can be considered low; about 14% of the certificates were issued outside the EU in countries with a sustainability risk low to medium, and 5% of certificates were issued in countries with higher risk of poor sustainable practices. This suggests that, while the current co-regulation process seems in general effective to assure sustainability, it may be challenged in the future when more biofuels originate from countries with higher risk of poor sustainability practices. In the context of higher risk countries supplying biofuel or biofuel feedstock to the EU, certification schemes with a narrow scope of sustainability requirements, and with lower levels of assurance, have a higher probability of not ensuring that sustainability claims are properly fulfilled. Besides this, cross-recognition of certificates may ‘greenwash’ biofuels originated in high risk countries. The assessment of the effectiveness of the recognised certification schemes should therefore include as well a revision of the recognition procedure. These assessments may result in the need to set corrective measures, such as possibly more defined and stricter criteria for the recognition of certification schemes, especially with respect to their level of assurance. For robustness of the co-regulation process, this assessment could be complemented with an evaluation of the status and robustness of the RED implementation at Member State level. The latest draft of the Renewable Energy Progress Report published by the EC explains that particularly in the larger Member States representing the bulk of biofuel consumption, the implemented national sustainability framework for biofuels works effectively. However, in some Member States there is still scope for improvements. Boosting the effectiveness of co-regulation in the EU – Lessons learned Recently proposed changes to the RED are in debate in the European Council and in the European Parliament. These changes aim at promoting the production and use of more sustainable (advanced) biofuels. These changes will most probably require that current co-regulation is adapted to serve effectively the wider types of feedstock, including lignocellulosic biomass, wastes and residues that may benefit from multiple counting measures. While the idea might sound simple, its implementation may be influenced by many technical and political factors that shall be addressed for ensuring a robust sustainability framework for the biofuels industry. SQ Consult has recently finished a study commissioned by the German Federal Ministry for Economic Cooperation and Development (BMZ) and GIZ (Deutsche Gesellschaft für Internationale Zusammenarbeit) published in April 2013. This study evaluates of the experiences gained with the implementation of the co-regulation process within the RED. The evaluated aspects include: - Availability and clarity of the administrative procedure for the recognition of private sustainability schemes for biofuels; - Transparency and confidentiality of the process; - Technical assessment framework; - Cross acceptance rules between private certification schemes; - Parallel recognition procedures at Member State level. This study, largely based on interviews with different stakeholders, has identified bottlenecks in the RED co-regulation procedure for recognition of private certification schemes. Ten lessons are identified that should inform future recognition processes. See a summary of lessons hereof in Table 1. |Transparency and confidentiality|| |Technical assessment framework|| |Cross acceptance between recognised schemes|| |Parallel recognition structures (EC and MS levels)|| Conclusions and steps forward The sustainability requirements established by the RED have started to shape effectively the market for sustainable biofuels in Europe. Our research shows though that the lack of clarity and guidance from the EC for the implementation of this co-regulation process may result in a variety of private certification schemes (with different scopes and different levels of assurance) applied to countries that have different contexts of sustainability risk. This situation may potentially produce lower levels of sustainability assurance compared to what the RED intended. The deficiencies in the co-regulation process also increase the risk of schemes not being recognised on an equal basis, or that some schemes are recognised too long after its competitors. These deficiencies affect the competition between certification schemes and may result in important losses of market share for some of them as consequence. Overall, these deficiencies contribute to a strong perception of insufficient transparency and lack of credibility. It is therefore highly needed to understand and monitor the individual performance of certification schemes and to assess whether they meet the desired level of sustainability in their target countries. The importance of a high minimum level of assurance is largely underestimated in the recognition procedure. Clear and more detailed guidance from the EC on the recognition criteria for certification schemes will help to avoid that freedom of interpretation reduces the overall effectiveness of this co-regulation. It is recommended that the EC establishes a more defined and stricter recognition framework, especially in verification requirements, in the next revision of the RED. Rules for the harmonisation between certification schemes, and for cross recognition, should also be more effectively established. These actions would set incentives for schemes to continuously improve their standards and operations. Furthermore, biofuel certification should be placed in the broader context of sustainable biomass production. This is especially important given the growth of sustainability certification schemes in an international context with increasing multiple end-uses (biobased products, food, fuel, and energy) and purposes. Regulating one use of biomass disregards the fact that the supply chains of other uses are closely linked, especially for agricultural commodities. This multitude of use forms requires sustainability criteria that set incentives to significantly improve the sustainability performance of agricultural production and trade. The EC has an important role in shaping such incentives and to contribute to the harmonisation of sustainability requirements for all biomass uses. This article was published in the June 2013 issue of the BE-Sustainable magazine http://www.besustainablemagazine.com ¹ The report “Recognition of private certification schemes for public recognition. Lessons learned from the Renewable Energy Directive” can be downloaded from http://www.giz.de/Themen/

A syndicate is a temporary alliance of financial services firms or businesses that is formed to complete one or more specific financial deals, transactions or joint business efforts. Syndicates can have various structures of organization, but are primarily either composed of primaries and secondaries, with associated rights and responsibilities, or of equal partners to a deal. Syndicates tend to form when a deal or undertaking is either too large in monetary terms or too risky for only one organization to handle safely and effectively. For example, some of the largest initial public offerings (IPOs) are underwritten by syndicates. Banking syndicates tend to form for financing very large corporate loans. Some projects or deals require massive amounts of investment that traditional capital markets are ill-suited to handle, in which case a syndicate of lenders is formed and a collective deal is struck for financing. Syndicated lending is preferable for the borrower as it vastly simplifies the processes of securing the loan and making payments. Underwriting syndicates are formed to support large initial public offerings (IPOs). Underwriters secure the IPO process by buying some or all of the shares of the initial offer at a fixed price and then selling the shares on the open market or through their internal sell-side divisions. Large IPOs may have a total share value that is too great for one underwriter to take on, so they seek out partners to act in an underwriting syndicate. An underwriting syndicate will usually feature a syndicate manager who takes the lead role in organizing the IPO and then secondary underwriters whose only role is to provide additional funding for the IPO itself. Global insurance is a multi-trillion dollar industry, and some insurance deals are correspondingly enormous. In these cases, insurance companies may form a syndicate to ensure that they can offer their clients comprehensive coverage without taking on extensive risks. Insurance syndicates are also prevalent in the reinsurance market, where insurance companies offer coverage to other insurance companies. Joint Business Syndicate Occasionally businesses will pool their resources on certain efforts and share the results according to pre-defined terms. These efforts may involve large projects that are too big for any single firm in an industry to handle, or research efforts where the results are shared among the participants. Joint business syndicates tend to be the most varied in their structures and goals, as it is generally uncommon for businesses to form syndicates. It is beneficial for traders to understand the nature of syndicates, especially when it comes to syndicates of investment banks underwriting IPOs. IPOs present an excellent opportunity for a wide variety of trading strategies, from fundamental analysis to price action, and knowing who the underwriters are and their history with past IPOs offers invaluable insight into the future of a recently offered security. Joint business syndicates can also present excellent trading opportunities, as the projects or research involved can be difficult to value according to traditional systems and metrics.

(The current post may be considered as the starting shot for a number of post to be publish over the next four month as part of the didactic material of the Qualitative methods for market research subject from Master in Management in the Faculty of Economics of University of Gdansk (See about for further details) Despite the relation with many of the previous post about research methods in general, the next months will be addressed more specifically qualitative methods related issues) Although the meaning of research has been addressed in a previous post, suffice it to say here that it is “a detailed study of a subject, especially in order to discover (new) information or reach a (new) understanding”. It is important emphasize that research has to do with discovering new knowledge and improving our understanding of some specific topic. For this reason we can find as many sorts of research as subjects. Social research, economic research, biological research and, of course, market research, among others. But what does exactly market research mean? A simple glace to the meaning of “market” will make easier to understand the exactly meaning of the term. According to Cambridge dictionary market may refer to “the people who might want to buy something or a part of the world where something is sold”. From this definition we can deduce three important elements: the existence of a relation between a buyer and a seller of a specific product, the fact of having place in some specific place, that may be physical, like a city, or simply a street, or virtual, like on the Internet; finally, it is important underlying that a market may refer both to something real, it is a real relation that is already happening but also something that may happen in the future. In other words, the potential sales of a product may account for the meaning of market. So that, how can we define correctly the term “market research”. It is a process of understanding the relation between a buyer and a seller of a specific product or service that occur or might occur in a part of the world. It is necessary to add that the market research´s final aim is always to help organizations make decision, i.e. you may work in any organization, in a government, in a service industry company, in a factory or in a finance or human resources department. Even though your function or role may not include the word “marketing”, your organization or department will have customers. The role of market research is precisely to provide information about these customers (real and potential) in order to make the best decision. Having said all this, here’s a complete and consistent definition of market research: “It is a process of understanding the relation between a buyer and a seller of a specific product or service that occur or might occur in the future in a part of the world in order to help organizations make decisions” Gathering information by mean both quantitative methods, such as questionnaire or content analysis, as well as qualitative methods such as in-depth interviews or focus group, are an essential part of the market research process, although not the only one, as we will see into details in future posts. Cambridge Dictionary Online. http://dictionary.cambridge.org/ Flick, U. (2009). An introduction to qualitative research. Sage Publications Limited. Martínez, P., & Rodríguez, P. M. (2008). Cualitativa-mente. ESIC Editorial.

This paper describes the data and methodology used in the author’s forecast model for oil and gas production. This models the world’s 64 largest oil and gas producing countries individually, plus a category for remaining countries. For oil, forecasts primarily cover production of ‘Regular Conventional’ oil (oil in fields, less Arctic, deep offshore, and very heavy oil); and separate forecasts are made for the production of NGLs and the non-conventional oils. The modelling involves the following steps: – Obtain data on past production by year by hydrocarbon category since production started for each of the 65 regions modelled. – Likewise, assemble estimates on the total quantities of oil and gas likely to be produced by each region by the year 2100. A number of techniques can be used for this, including extrapolation of the following: ‘creaming curves’ of oil or gas discovery – i.e., plots of discovery over time vs. number of exploration (‘new field wildcat’) wells drilled; parabolic fractal representations of discovery; and production plots using a linearised ‘Hubbert’ curve approach. The data used need to be based on proved-plus-probable (‘2P’) estimates of remaining reserves, not on ‘proved’ (‘1P’) reserves; and checked against geologically-based evaluations of the oil and gas remaining to be discovered. – Subtract past production from this ‘total production to 2100’, and then estimate the percentages of this that will come from already-discovered fields (‘2P reserves’), and the yet-to-find. – Assess for each region the future production rate, taking into account ‘mid-point’ peak; and realistic post-peak production decline rates. – Add in data on expected production on NGLs and non-conventional oils in those regions where these liquids will be important to give global forecasts. – In addition, the modelling allows the different ratios of energy return on energy invested (‘EROI’) of the different categories of hydrocarbons to be accounted for, to yield forecasts of the net-energy that will be available to society. Based on the above modelling the paper finds that the First Half of the Oil Age is about over, and the Second Half will see declining global oil and gas production due to resource depletion. The paper concludes that this need not be a ‘doomsday’ message, provided society acts in positive and constructive ways to these constraints imposed by Nature. Campbell, C. J. (2015) Modelling Oil and Gas Depletion. The Oil Age 1 (1) 9-34. Download PDF – FreeCLICK HERE

wk2 a2 db michael smith This module you are learning about the four required financial statements and what each tells the user about a company. Locate three publicly traded companies’ financial statements. Discuss the companies you located and describe what each of the four required financial statements tells you about the company. Also, briefly describe at least two interesting pieces of information located in the notes following the financial statements. You are looking for a company’s annual report. There are many reports filed by companies each year. The annual report is called the 10K. There are several ways to locate financial statements. You can go to the company’s website and look for financial or investor information. You can go directly to the company’s filing section of the SEC website. You can also use the Argosy University online library resources. The library subscribes to Hoover’s database, which contains companies’ financial filings. This site is easier to use than the SEC website. You locate the filings by going to the Argosy University online library through the Academic Resources page under the top-navigation Help menu. Then follow these steps: Click on Library -> Launch Library -> Business -> Hoover’s Academic -> Continue -> All Categories -> type the name of your chosen company -> Financials -> SEC filings Note: If there is no link to SEC filings, the company is not a public company and you may not use it for this project.

Central bankers cannot find a way to help borrowers without hurting savers You may have noticed that interest rates (be they bank interest rates, yields on bonds or whatever) are very low. They have been very low for a long time. Interest rates in some countries have even gone negative, whatever that means. There are logical explanations that economists offer. I understand them. But to me, low interest rates are just like a tax on my savings income. Let me tell you why. And you don’t need to understand economics to get my point. In the countries I’m thinking of, the central bank sets an interest rate. This is the rate that banks (where you and I deposit money) pay when they borrow from the central bank. Many other interest rates depend on the level of this central bank rate. What that does is to make all short-term interest rates lower, when the central bank reduces its declared rate. Central banks also do something called “quantitative easing” – a jargon phrase, if ever there was one. Never mind “quantitative” – that just describes the technical method – it’s the easing of borrowing conditions, not just short-term but also long-term, that’s the goal. A natural consequence of the central bank’s moves is that borrowing money becomes cheaper. And if governments and people can borrow money more cheaply, they’re more likely to do so, and that in turn gives them more money to spend. So that’s what central banks have in mind: they’re trying to stimulate spending in the economy, and keep the economy growing if it might otherwise look like it’s slowing down. That’s a good cause, so it’s good news, right? For borrowers, yes. But not for savers! Suppose the “natural” interest rate that a bank would offer on your savings deposits (the rate that would apply if the central bank weren’t deliberately lowering rates) is 4%. And suppose the actual rate is 1%. You’re losing 3% that you would have been given if interest rates weren’t artificially forced down. To me, that’s just like a tax. It’s like an increase in income tax rates. It has the same effect on your after-tax income as paying you 4%, then taxing you at 100% on the first 3% and at your normal tax rates on the remaining 1%. It’s like: “Give the first 3% back to the government.” So I don’t think of “quantitative easing” as anything but a tax increase compared with normal economic conditions. But of course it’s much more acceptable if the hated word “tax” can be avoided, and even better if a jargon phrase is used instead, because there’s no chance the public will get it. Another consequence of lower interest rates is that it becomes more attractive to invest money in enterprises that seek growth. Partly this is because the enterprises find it cheaper than before to borrow, so their after-borrowing profits should rise. And partly because their future profits are worth more today, if you’re discounting them at lower interest rates. So investors are also favored by lower interest rates. And therefore they’re more inclined to invest. (Did you notice how stock markets and property values soared, as interest rates fell over the past decade, before the pandemic?) By the way, economists often don’t distinguish between savers and investors. I do. To me, an investor is someone who seeks long-term growth and can afford to take the shorter-term risks that inevitably accompany growth-seeking investments. A saver is someone who can’t afford to lose money; for them, short-term certainty is more important, so anything that could go down in the short term is avoided. Overall, therefore, lower interest rates are good for investors and bad for savers. As I’ve said, the cost of the stimulus is borne, at least in part, by savers, who get paid less. The old, the poor and the financially illiterate are the most vulnerable – those who can’t afford to lose money, or don’t have the time, sophistication or resources to avoid the obstacles placed in their path. I specifically include people in retirement here, because their planning time horizon shortens as they age; this makes them more risk-averse, so they’re much more likely to be savers than investors. It’s not that central bankers actively dislike savers. They just can’t find a way to help borrowers without hurting savers. Their tools are very blunt instruments, as they acknowledge. The cost of stimulus is also borne by future taxpayers, because the increase in debt that results from whatever increase goes onto the government’s balance sheet must be repaid some day. Maybe it’ll be through new borrowing to repay the old loans, or maybe it’ll be through explicitly higher future taxes. But one way or another, the can gets kicked down the road, and future generations will inherit worse conditions than they otherwise would – so that the current generation can benefit. Yes, I know I’m over-simplifying. But that’s only in the details that I’ve skipped over, for ease of explanation. The basic analysis is accurate. Artificially lowered interest rates are used as an economic stimulus, to raise spending and investment. The immediate cost is borne by savers, for whom it’s akin to an immediate tax increase. This piece appeared under my name in the weekend edition of the UK Financial Times on June 27, 2020, in the Money section. It appeared in the online edition on June 24, 2020. I was described as “the former co-chairman of global consulting for Russell Investments worldwide, and the author of Life Two: how to get to and enjoy what used to be called retirement.” I have written about retirement planning before and some of that material also relates to topics or issues that are being discussed here. Where relevant I draw on material from three sources: The Retirement Plan Solution (co-authored with Bob Collie and Matt Smith, published by John Wiley & Sons, Inc., 2009), my foreword to Someday Rich (by Timothy Noonan and Matt Smith, also published by Wiley, 2012), and my occasional column The Art of Investment in the FT Money supplement of The Financial Times, published in the UK. I am grateful to the other authors and to The Financial Times for permission to use the material here.

Blockchain and the wider category of distributed ledger technologies (DLTs) promise a more transparent, accountable, efficient and secure way of exchanging decentralised stores of information that are independently updated, automatically replicated and immutable. The key components of DLTs include shared recordkeeping, multi-party consensus, independent validation, tamper evidence and tamper resistance. Building on these claims, proponents suggest DLTs can address common problems of non-profit organisations and NGOs, such as transparency, efficiency, scale and sustainability. Current humanitarian uses of DLT, illustrated in this report, include financial inclusion, land titling, remittances, improving the transparency of donations, reducing fraud, tracking support to beneficiaries from multiple sources, transforming governance systems, micro-insurance, cross-border transfers, cash programming, grant management and organisational governance. This report, commissioned by the Global Alliance for Humanitarian Innovation (GAHI), examines current DLT uses by the humanitarian sector to outline lessons for the project, policy and system levels. It offers recommendations to address the challenges that must be overcome before DLTs can be ethically, safely, appropriately and effectively scaled in humanitarian contexts.

Trading has been a practice since the birth of mankind. Giving up one thing to gain another, for after all that is all currency is. Giving someone money for an item you need or want, it’s a trade. However two thousand years ago if you were to offer someone a piece of paper with a number and picture on it for an item you wanted, you’d probably be laughed at. Trading objects for paper money is in relative terms, still a fairly novel concept. So where did this radical notion originate? I’ll give you one guess, China. Paper currency was first developed in the Tang Dynasty during the 7th century (which was from 601-700AD), although true paper money did not appear until the 11th century (1001-1100). The usage of paper currency would later spread throughout the Mongol Empire and be utilized by explorers in their own countries. Such as European explorer Marco Polo, who introduced the concept in Europe during the 13th century. Paper money originated in two forms: Drafts, which are receipts for the value held on account, and “Bills”, which were issued with a promise to exchange at a later date. The concept of banknotes as money has evolved over time. Originally, money was based on the value of precious metals. Banknotes were just seen as a way to IOU – a promise to pay someone with precious metals upon redemption of the banknote. However, with the gradual removal of precious metals, banknotes progressed to represent credit when being backed by the government. In America the first place to issue circulating banknotes was Massachusetts in the early 1690’s. The use of fixed denomination and printed banknotes came in the early 18th century, when each of the individual 13 colonies issued their own banknotes. Each state continued to use their own currency for approximately 100 years until the adoption of the Constitution in 1789 and Congress authorized for the first time the Bank of the United States to issue all banknotes. Now there are thousands of different banknotes being used daily around the world, so which of them will end up in your collection? If you read the last blog I wrote you may have an idea of where you’ll start your collection, just as I hope you have a better idea of how currency originally got its own start. With all this in mind, one great thought about collecting banknotes, money, bills, dosh, sponduliks, or whatever you like to call it, just think when you hold a banknote from say Nepal in your hand, it is always interesting to think that someone in that country maybe (or has been for older currency) been using this in the same way we use our dollar bills. It is fascinating to think that over the years people all over the world, just like us have paper money so different in color, size, denominations, depictions etc, but are using it pretty much the same way as we do. To add a final thought, just think recently in Zimbabwe they had been using banknotes with 14 zeros – that is 100,000,000,000,000 or 100 Trillion dollars and this probably brought you a carton of eggs (definitely not a Starbucks coffee).

Research initiative led by: the City of Guelph Date published: August 2017 Research commissioned by: the Large Urban Mayors’ Caucus of Ontario (LUMCO) Why did we select this research? This report is designed to help municipalities understand this new economy, what it means on a local level and how to respond appropriately. In other words, the report navigates this new terrain to help city leaders analyze the impact of various sharing economy services on their own residents and businesses and make decisions based on local needs. The Guide provides a brief introduction to the sharing economy and then identifies the following six decisions to guide municipalities that are anticipating or reacting to a shared economy platform in their jurisdiction. - What type of approach is most appropriate? - What are the primary public policy goals? - What type(s) of sharing will be included? - What kinds of policy actions or tools are needed? - Design considerations - Implementation and evaluation The Guide includes case study examples to illustrate different ways municipalities have answered these questions, along with links to further reading materials, resources and cases. Municipalities should keep three points in mind: - The sharing economy encompasses a wide range of models and sectors. The term “sharing economy” brings to mind private companies such as Uber and Airbnb. However, sharing itself is part of a larger tradition, the most established and promising examples of sharing are not always found in Silicon Valley and don’t necessarily involve sophisticated apps. This sector includes bike-sharing programs, community gardens and many other socially and ecologically minded ventures. Case studies in this Guide were selected to help illuminate these lesser-known but important and impactful examples. - There is currently a lack of data on the impacts of the sharing economy, especially outside of large cities, but the data that does exist points to both positive and negative impacts. The range of models and the rapid growth of sharing make it difficult to draw general conclusions about the impacts of sharing. In some cases, there just isn’t enough data to fully evaluate impacts. In other cases, concerns have been raised. This Guide does not explore specific sectors or sharing initiatives, but what is clear is that municipalities must consider a range of potential positive and negative impacts. Responding to the sharing economy has the potential to realize significant public value, including: • improvements in service delivery and cost reductions • economic development • a reduction in environmental impacts At the same time, municipalities should not ignore potential issues that may arise in the context of certain sharing initiatives, such as: • uneven service delivery • the rise of precarious employment • lack of independent data to accurately track the impact of sharing-driven activities • the erosion of consumer protections Municipalities will need to both evaluate impacts at a local level and take steps to ensure any sharing initiatives in their community are carefully aligned with their goals. - Municipalities have a range of options available to shape the local sharing economy. Municipalities that choose to engage with the sharing economy are not limited to establishing regulations through bylaws. Instead, there is a range of options local governments can use to craft a response that advances the public interest. Some of these tools may already be familiar to municipalities; other tools provide ample opportunity to introduce novel forms of procurement, decisionmaking and public engagement into municipal processes. The choice of tool will depend on local contexts and objectives: there is no one-size-fits-all solution. Different models of sharing necessitate different responses, and local governments can opt to play a number of different roles depending on their policy objectives.

Bank of Canada partners with Canadian Foundation for Economic Education to launch new website Today, Bank of Canada Governor Stephen S. Poloz welcomed students and teachers to the Bank of Canada Museum for the launch of Money and Monetary Policy in Canada. This online resource for educators was authored by the Canadian Foundation for Economic Education (CFEE) in close collaboration with Bank staff. Using simple language and relatable examples, it explains topics such as the use and history of money, how the financial system works, the role of the central bank, and how interest rates are set. “This is another important investment the Bank has made to encourage economic education in Canada,” Governor Poloz said. “As with last week’s launch of The Economy, Plain and Simple, we hope this resource will make economics more accessible and meaningful to students, educators and the general public.” The new website is structured in a modular format so that educators can select the topics that fit best with their curriculum and course work. The content is bilingual, and teachers’ guides accompany each module. Beginning in 2019, the Bank of Canada Museum will deliver educational programs for elementary and secondary school students to complement the tours already provided as part of school visits. This work has greatly benefited from the Bank’s long-standing relationship with CFEE. “It is an honour to partner with the Bank on a resource that will help Canadians—especially youth—be better prepared for the economic challenges and opportunities they will encounter in life,” said Gary Rabbior, President of CFEE. “Our organization believes good economic policy benefits from Canadians understanding the rationale for policy decisions, recognizing appropriate policy measures once taken and—through their own actions—enabling good policy to run its course.” A previous printed edition of Money and Monetary Policy in Canada is currently used in high schools and post-secondary institutions. The materials on www.moneyandmonetarypolicyincanada.com are free. Notes to editors - The Bank of Canada is the nation’s central bank. Since 1935, its principal role has been to promote the economic and financial welfare of Canada. - The Bank of Canada Museum explains the central bank’s four main areas of responsibility through hands-on, interactive exhibits. It also manages more than 128,000 artifacts in the National Currency Collection, the world’s most complete collection of Canadian currency and related artifacts. - Founded in 1974, the Canadian Foundation for Economic Education is a federally chartered, non-profit, non-partisan organization that works to improve economic and financial literacy, as well as enterprising capability. The foundation works collaboratively with government ministries, school boards and teacher associations to make a host of print resources, videos, workshops and online resources available to all Canadians. - For B-roll and stock photos of the Museum, contact Media Relations.

The travel and tourism industry is undeniably one of the biggest success stories of the last 75 years. While the world has undergone huge changes since the end of the Second World War and many industrial sectors have experienced turmoil and decline, travel and tourism have enjoyed remarkable growth. This article presents a selection of data illustrating the expansion of the travel industry prior to Covid-19. It acts as a necessary and timely reminder of the phenomenal contribution that travel and tourism make to the global economy. We also underline the key fundamentals that point to a return to growth in the very near future. Travel and tourism accounted for 10.3% of global GDP and 330 million jobs, or 10.4% of total employment in 2019, according to the World Travel &Tourism Council (WTTC). As a generator of export earnings, it comes in third place, after chemicals and fuels, and ahead of automotive products. From 2014 to 2019, 25% of all new jobs created across the world were in travel and tourism. Chart 1: International Tourist Arrivals by World Region Chart 1 ( above) shows how tourist arrivals have increased since 1950. According to The United Nations World Tourism Organization (UNWTO) there were only 25 million international tourist arrivals in 1950. By 2018, that number had multiplied by 56 to 1.4 billion international arrivals. Chart 2: The Changing Global Distribution of Tourist Arrivals. Chart 2 shows the distribution of international tourist arrivals by region. Between 1950 and 1970 around two thirds of all outbound travel was to Europe. Over time, the relative importance of Europe has decreased, although, with a 50% share it still remains the most important tourist region in the world (and Paris the most visited city). Asia Pacific had a negligible share of tourist arrivals in 1950. Since then its importance has grown and it now accounts for around 25% of all outbound travel. Chart 3: Number of Air Transport Passengers 1970 to 2017 Chart 3 illustrates the growing prevalence of air travel. The graph highlights how an increase in prosperity and a rising number of middle-class households has fuelled the global population’s appetite for air travel. Chart 4: Number of Luxury Hotel Rooms in China 2019-2023 A report by Global Data on the hotel market in China underlines a correlation between the number of high net worth individuals in the country and the growth in the number of luxury hotels (see Chart 4). The number of Chinese citizens who are worth more than one million US dollars has grown to around 4.5m today. Global Data says that this increases the likelihood of domestic tourism contributing to the majority of China’s hotel revenues. The latest research from Lodging Econometrics confirms that Covid-19 has done nothing to slow the growth of China’s hospitality industry. China’s total hotel construction pipeline has kept on growing, reaching an all-time high of 647,704 rooms in the second quarter of 2020. Chart 5: Booking Holdings Gross Travel Bookings and Room Nights Booked 2008 to 2019 In addition to hotel real estate needing to keep pace with our growing appetite for travel, the 21st century has witnessed the transformation of traditional travel agents and rise of online travel agencies and online hotel bookings. There are understood to be more than 400 OTAs in operation today. The biggest players, Booking Holdings and Expedia, reportedly enjoy more than 80% of the total OTA market. Chart 5 shows how the online booking of trips and overnight stays has become the norm over the last few years. Gross travel bookings made via Booking Holding’s portfolio of consumer websites, for example, rose from $7.4b in 2008 to $96.4b in 2019. The number of hotel room nights booked increased from 40.8m in 2008 to 844m in 2019. According to the WTTC, global GDP from travel and tourism grew by 3.5% in 2019, a rate higher than that of the global economy as a whole for the ninth year in a row. Asia Pacific was the fastest growing region with 5.5% growth. Chart 6: Number of Overseas Visitors to Japan 2003 to 2020 Japan, for example, welcomed 31.9m inbound visitors, a new record for the seventh consecutive year (see Chart 6). Inbound tourism spend was up 5.9% supported by the government putting tourist at the heart of its growth strategy and by the hosting of the Rugby World Cup. Looking ahead to the return of growth It is inevitable that travel and tourism’s remarkable rise will be affected by Covid-19. There is no getting around the hole in revenues left by four months of enforced closure during the first half of 2020. However, domestic leisure tourism is already staging an impressive recovery in many destinations. Outbound travel is expected to follow in 2021. On a global scale, the WTTC says that the leisure market accounts for 78.6% of total tourism gross merchandise volume (GMV), compared with 21.4% from business spend. Ben Walker has 18 years of experience in the hotel and travel sectors. He has worked as PR & communications manager for TRI Hospitality Consulting London, the creators of HotStats, the hotel market benchmarking, financial analysis, and performance reporting solution. He has also been the business editor of The Caterer, and communications manager and editor for the international professional body, the Institute of Hospitality.

Gap Trading Strategies - Part 1 Part 1 | Part 2 Gap trading is a simple and disciplined approach to buying and shorting stocks. Essentially one finds stocks that have a price gap from the previous close and watches the first hour of trading to identify the trading range. Rising above that range signals a buy, and falling below it signals a short. |What is a Gap?| A gap is a change in price levels between the close and open of two consecutive days. Although most technical analysis manuals define the four types of gap patterns as Common, Breakaway, Continuation and Exhaustion, those labels are applied after the chart pattern is established. That is, the difference between any one type of gap from another is only distinguishable after the stock continues up or down in some fashion. Although those classifications are useful for a longer-term understanding of how a particular stock or sector reacts, they offer little guidance for trading. For trading purposes, we define four basic types of gaps as follows: A Full Gap Up occurs when the opening price is greater than yesterday's high price. In the chart below for Cisco, the open price for June 2, indicated by the small tick mark to the left of the second bar in June (green arrow), is higher than the previous day's close, shown by the right-side tick mark on the June 1 bar. A Full Gap Down occurs when the opening price is less than yesterday's The chart for Amazon below shows both a full gap up on August 18 (green arrow) and a full gap down the next day (red arrow). A Partial Gap Up occurs when today's opening price is higher than yesterday's close, but not higher than yesterday's high. The next chart for Earthlink depicts the partial gap up on June 1 (red arrow), and the full gap up on June 2 (green arrow). A Partial Gap Down occurs when the opening price is below yesterday's close, but not below yesterday's low. The red arrow on the chart for Offshore Logistics, below, shows where the stock opened below the previous close, but not below the previous low. |Why Use Trading Rules?| In order to successfully trade gapping stocks, one should use a disciplined set of entry and exit rules to signal trades and minimize risk. Additionally, gap trading strategies can be applied to weekly, end-of-day, or intraday gaps. It is important for longer-term investors to understand the mechanics of gaps, as the 'short' signals can be used as the exit signal to sell holdings. |The Gap Trading Strategies| Each of the four gap types has a long and short trading signal, defining the eight gap trading strategies. The basic tenet of gap trading is to allow one hour after the market opens for the stock price to establish its range. A Modified Trading Method, to be discussed later, can be used with any of the eight primary strategies to trigger trades before the first hour, although it involves more risk. Once a position is entered, you calculate and set an 8% trailing stop to exit a long position, and a 4% trailing stop to exit a short position. A trailing stop is simply an exit threshold that follows the rising price or falling price in the case of short positions. Long Example: You buy a stock at $100. You set the exit at no more than 8% below that, or $92. If the price rises to $120, you raise the stop to $110.375, which is approximately 8% below $120. The stop keeps rising as long as the stock price rises. In this manner, you follow the rise in stock price with either a real or mental stop that is executed when the price trend finally reverses. Short Example: You short a stock at $100. You set the Buy-to-Cover at $104 so that a trend reversal of 4% would force you to exit the position. If the price drops to $90, you recalculate the stop at 4% above that number, or $93 to Buy-to-Cover. The eight primary strategies are as follows: Full Gap Up: Long If a stock's opening price is greater than yesterday's high, revisit the 1-minute chart after 10:30 am and set a long (buy) stop two ticks above the high achieved in the first hour of trading. (Note: A 'tick' is defined as the bid/ask spread, usually 1/8 to 1/4 point, depending on the stock.) Full Gap Up: Short If the stock gaps up, but there is insufficient buying pressure to sustain the rise, the stock price will level or drop below the opening gap price. Traders can set similar entry signals for short positions as follows: If a stock's opening price is greater than yesterday's high, revisit the 1-minute chart after 10:30 am and set a short stop equal to two ticks below the low achieved in the first hour of trading. Full Gap Down: Long Poor earnings, bad news, organizational changes and market influences can cause a stock's price to drop uncharacteristically. A full gap down occurs when the price is below not only the previous day's close, but the low of the day before as well. A stock whose price opens in a full gap down, then begins to climb immediately, is known as a "Dead Cat Bounce." If a stock's opening price is less than yesterday's low, set a long stop equal to two ticks more than yesterday's low. Full Gap Down: Short If a stock's opening price is less than yesterday's low, revisit the 1-minute chart after 10:30 am and set a short stop equal to two ticks below the low achieved in the first hour of trading. The difference between a Full and Partial Gap is risk and potential gain. In general, a stock gapping completely above the previous day's high has a significant change in the market's desire to own or sell it. Demand is large enough to force the market maker or floor specialist to make a major price change to accommodate the unfilled orders. Full gapping stocks generally trend farther in one direction than stocks which only partially gap. However, a smaller demand may just require the trading floor to only move price above or below the previous close in order to trigger buying or selling to fill on-hand orders. There is a generally a greater opportunity for gain over several days in full gapping stocks. If there is not enough interest in selling or buying a stock after the initial orders are filled, the stock will return to its trading range quickly. Entering a trade for a partially gapping stock generally calls for either greater attention or closer trailing stops of 5-6%. Partial Gap Up: Long If a stock's opening price is greater than yesterday's close, but not greater than yesterday's high, the condition is considered a Partial Gap Up. The process for a long entry is the same for Full Gaps in that one revisits the 1-minute chart after 10:30 am and set a long (buy) stop two ticks above the high achieved in the first hour of trading. Partial Gap Up: Short The short trade process for a partial gap up is the same for Full Gaps in that one revisits the 1-minute chart after 10:30 am and sets a short stop two ticks below the low achieved in the first hour of trading. Partial Gap Down: Long If a stock's opening price is less than yesterday's close, revisit the 1 minute chart after 10:30 am and set a buy stop two ticks above the high achieved in the first hour of trading. Partial Gap Down: Short The short trade process for a partial gap down is the same for Full Gap Down in that one revisits the 1-minute chart after 10:30AM and sets a short stop two ticks below the low achieved in the first hour of trading. If a stock's opening price is less than yesterday's close, set a short stop equal to two ticks less than the low achieved in the first hour of trading today. If the volume requirement is not met, the safest way to play a partial gap is to wait until the price breaks the previous high (on a long trade) or low (on a short trade). Part 1 | Part 2

1. “We have to have a business with some inherent characteristics that give it a durable competitive advantage.” Professor Michael Porter calls barriers to market entry that a business may have a “sustainable competitive advantage.” Warren Buffett and Charlie Munger call them a “moat.” The two terms are essentially identical. Buffett puts it this way: “The key to investing is not assessing how much an industry is going to affect society, or how much it will grow, but rather determining the competitive advantage of any given company and, above all, the durability of that advantage. The products or services that have wide, sustainable moats around them are the ones that deliver rewards to investors.” A complete discussion about the nature of moats can’t be done well in a ~3,000 word blog post since it is one of the most complex topics in the business world. For this reason, in my book on Charlie Munger I put the material on moats in an appendix since I feared readers would bog down and not focus on the more important points such as making investment and other decisions in life. But the complexity of the topic does not change the fact that to be a “know-something” investor you must understand moats. Even the fate of the smallest business like a bakery or shoe store will be determined by whether they can create some form of moat. The small business person may not now what a moat is called but the great ones know that they must generate barriers to entry to create a profit. The underlying principle involved in moat creation and maintenance is simple: if you have too much supply of a good or service, price will drop to a point where there is no long-term industry profit above the company’s cost of capital. Michael Mauboussin, in what is arguably the best essay ever written on moats put it this way, “Companies generating high economic returns will attract competitors willing to take a lesser, albeit still attractive return, which will drive aggregate industry returns to opportunity cost of capital.” The best test of whether a moat exists is quantitative, even though the factors that create it are mostly qualitative. If a business has not earned returns on capital that substantially exceed the opportunity cost of capital for a period of years, it does not have a moat. If a business must hold a prayer meeting to raise prices it does not have a moat. A business may have factors that may create a moat in the future, but the best test for a moat is in the end mathematical. The five primary elements which can help create a moat are as follows: 1. Supply-Side Economies of Scale and Scope; 2. Demand-side Economies of Scale (Network Effects); 3. Brand; 4. Regulation; and 5. Patents and Intellectual Property. Each of these five elements is worthy of an entire blog post or even a book. These elements and the phenomenon they create are all interrelated, constantly in flux and when working together in a lollapalooza fashion often create nonlinear positive and negative changes. For me, questions related to the creation, maintenance and destruction of moats are the most fascinating and challenging aspects of the business world. There are no precise formulas or recipes that govern moats but there is enough commonality that you can get better at understanding moats over time. 2. “We’re trying to buy businesses with sustainable competitive advantages at a low – or even a fair price.” “Everyone has the idea of owning good companies. The problem is that they have high prices in relations to assets and earnings, and that takes all of the fun out of the game. If all you needed to do is to figure out what company is better than others, everyone would make a lot of money. But that is not the case.” Buying a business with a moat is a necessary but not a sufficient condition for achieving financial success in a business. What Charlie Munger is saying in these sentences is that if you pay too much for a moat you will not find success. No one makes this point better than Howard Marks who writes: “Superior investors know – and buy – when the price of something is lower than it should be… most investors think quality, as opposed to price, is the determinant of whether something’s risky. But high-quality assets can be risky, and low-quality assets can be safe. It’s just a matter of the price paid for them.” Some people have this idea that value investing is only about buying cheap assets. The reality is that many assets are cheap for good reason. Genuine value investing is about buying assets at a substantial discount to their value. This is why Charlie Munger says that: “All intelligent investing is value investing.” What he means is: is there any type of investing whether the objective is to pay more than an asset is worth? There are some assets for which an intrinsic value can’t be computed, but that is a different question than whether an asset should be purchased at a discount to its value. Buffett writes: “The very term ‘value investing’ is redundant. What is ‘investing’ if it is not the act of seeking value at least sufficient to justify the amount paid? Consciously paying more for a stock than its calculated value — in the hope that it can soon be sold for a still-higher price — should be labeled speculation.” 3. “You basically want me to explain to you a difficult subject of identifying moats. It reminds me of a story. One man came to Mozart and asked him how to write a symphony. Mozart replied, “You are too young to write a symphony.” The man said, “You were writing symphonies when you were 10 years of age, and I am 21.” Mozart said, “Yes, but I didn’t run around asking people how to do it.” “We buy barriers. Building them is tough… Our great brands aren’t anything we’ve created. We’ve bought them. If you’re buying something at a huge discount to its replacement value and it is hard to replace, you have a big advantage. One competitor is enough to ruin a business running on small margins.” While there is no formula or recipe for creating a moat there are many common principles that can be used in trying to create or identify one. For example, Munger has said: “In some businesses, the very nature of things cascades toward the overwhelming dominance of one firm. It tends to cascade to a winner take all result.” On another occasion he said: “Do you know what it would cost to replace Burlington Northern today? We are not going to build another transcontinental.” It is important to note that there is a world of difference between creating a new moat than buying an existing one. For example, the venture capital business is fundamentally about building moats and the value investing discipline, as practiced by Munger and Buffett, is instead about buying existing moats at a discount to the intrinsic value of the business. 4. “The only duty of corporate executive is to widen the moat. We must make it wider. Every day is to widen the moat. We gave you a competitive advantage, and you must leave us the moat. There are times when it’s too tough. But your duty should be to widen the moat. I can see instance after instance where that isn’t what people do in business. One must keep their eye on the ball of widening the moat, to be a steward of the competitive advantage that came to you.” What Charlie Munger is saying in these sentences is that operational excellence in running a business is very important, but the factors that maintain the barriers to entry of the business must also receive proper attention by management. For example, if the moat of a business is based on network effects or intellectual property those factors can’t be ignored. Sometimes playing defense is needed in whole or in part, as was the case when Facebook bought several potential moat destroyers. The Instagram, Oculus and WhatsApp acquisitions were in no small part designed to widen the existing Facebook moat. Of course, the companies were bought to create new moats too, so in that sense they served two purposes (i.e., the acquisitions served both offensive and defensive purposes for Facebook). Startups potentially have an asymmetrical advantage since often they are bought by incumbents just for defensive reasons (i.e., sometimes in an acquisition only consumers benefit since the new service or good is all, or nearly all, consumer surplus). 5. “How do you compete against a true fanatic? You can only try to build the best possible moat and continuously attempt to widen it.” The job of a businessperson is to try to create product or service which are sufficiently unique that constraints are placed on other companies who desire to provide a competing supply of those goods or services. For this reason moat creation and maintenance is a key part of the strategy of any business. What this means is that the essential task of anyone involved in establishing a strategy for a business is defining how a business can be unique. Creating a business strategy is fundamentally about making choices. It is not just what you do, but what you choose not to do, that defines an effective strategy. Professor Michael Porter argues that doing what everyone must do in a business is operational effectiveness and not strategy. The people who most often create unique compelling offerings for customers are true fanatics. Jim Sinegal of Costco is just such a fanatic which is why Charlie Munger serves on their board. Going down the list of Berkshire CEOs reveals a long list of fanatics. 6. “Frequently, you’ll look at a business having fabulous results. And the question is, ‘How long can this continue?’ Well, there’s only one way I know to answer that. And that’s to think about why the results are occurring now – and then to figure out what could cause those results to stop occurring.” This set of sentences is an example of Charlie Munger applying his inversion approach. He believes that when you have a hard problem to solve the best solution often appears when you invert the problem. For example, Munger applies the inversion process to moat analysis. Instead of just looking at why a moat exists or can be made stronger, he is saying you should think about why it may weaken. He is looking for sources of unique insight that might have been missed by others who may be too optimistic. Not being too optimistic is consistent with his personality. Munger has called himself a “cheerful pessimist.” Over time the forces of competitive destruction will inevitably weaken any moat. Munger has said: “It is a rare business that doesn’t have a way worse future than a past.” “Capitalism is a pretty brutal place.” “Over the very long term, history shows that the chances of any business surviving in a manner agreeable to a company’s owners are slim at best.” Bill Gates describes what Berkshire is looking for in a business as follows: “[they] talk about looking for a company’s moat — its competitive advantage — and whether the moat is shrinking or growing.” 7. “Kellogg’s and Campbell’s moats have also shrunk due to the increased buying power of supermarkets and companies like Wal-Mart. The muscle power of Wal-Mart and Costco has increased dramatically.” Wholesale transfer pricing power, also sometimes called supplier bargaining power (e.g., in the Michael Porter five forces model) is a potential destroyer of moats. Understanding who has pricing power in a value chain is a critical task for any manager. As an example of a moat being attacked in this way, the venture capitalist Chris Dixon wrote once about a chain of events in the gaming industry : “In Porter’s framework, Zynga’s strategic weakness is extreme supplier concentration – they get almost all their traffic from Facebook. It is in Facebook’s economic interest to extract most of Zynga’s profits, leaving them just enough to keep investing in games and advertising.” As another example, most every restaurant which does not own its building faces this same wholesale transfer pricing problem. If you have an exclusive supplier of a necessary input, that supplier controls your profits. It is wise to have multiple suppliers of any good or service, at least potentially. 8. “What happened to Kodak is a natural outcome of competitive capitalism.” “The perfect example of Darwinism is what technology has done to businesses. When someone takes their existing business and tries to transform it into something else—they fail. In technology that is often the case. Look at Kodak: it was the dominant imaging company in the world. They did fabulously during the great depression, but then wiped out the shareholders because of technological change. Look at General Motors Company, which was the most important company in the world when I was young. It wiped out its shareholders. How do you start as a dominant auto company in the world with the other two competitors not even close, and end up wiping out your shareholders? It’s very Darwinian—it’s tough out there. Technological change is one of the toughest things.” I don’t know of any business in today’s business world that does not face significant disruptive threats. None. It is brutally competitive to be involved any business today. Do some businesses have moats that make their lines of business relatively more profitable? Sure. But I can’t think of any business which is not under attack right now. When I say every business is competitive in todya’s world I mean every business. Life as the owner of a sandwich shop, a food processor, marketing consultancy, etc. is inevitably tough. Pricing power in the business world today is rarer than a Dodo bird. Technology businesses present a special case when it comes to moats since disruptive change is much more likely to be nonlinear. Businesses in the technology sector that seem relatively solid can disappear in the blink of an eye. The factors like network effects that can create startling success for a technology company can be just as powerful on the way down as they were the way up. 9. “The perfectly fabulous economics of this [newspaper] business could become grievously impaired.” The newspaper business once had a strong moat created by economies of scale inherent in huge printing plants and large distribution networks needed for physical newspapers. The Internet has caused the moats of newspapers to quickly atrophy, which is problematic for owners and society as a whole given that the news itself is what is called a “public good” (i.e., non-rival and non-excludable). Charlie Munger has lamented the decline of newspapers: “It’s not good for the country. We’re losing something.” Buffett has said it “blows your mind” how quickly the newspaper industry has declined. The way commentators on the financial prospects of newspapers ignore the public good problems is amazing really. Increasing something like quality does not fix a public good problem. Without some scarcity/a moat there will be no ability on the part of newspapers to generate a profit. Solutions to journalism business model problems are likely to include philanthropy as is the case with other public goods. 10.“Network TV [in its heyday,] anyone could run and do well. If Tom Murphy is running it, you’d do very well, but even your idiot nephew could do well.” Some moats are so strong that even a weak management teams can prosper running the business. The broadcast television moat is not what it once was given the rise of things like over the top viewing. But at one time television had a bullet proof moat. Buffett believes: “When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact.” Munger certainly wants a business in which he invests to be run by capable and trustworthy managers. Operational excellence is always desired. But having a moat is a protection against a poor manager running a business into the ground. Buffett said once: “Buy into a business that’s doing so well an idiot could run it, because sooner or later, one will.” 11. “I think it’s dangerous to rely on special talents — it’s better to own lots of monopolistic businesses with unregulated prices. But that’s not the world today.” In these sentences Charlie Munger uses a term that Peter Thiel likes to use when referring to a moat: “monopoly. While it is certainly profitable to own an unregulated monopoly, the number of businesses today that have moats which can be considered a monopoly is vanishingly small. For this reason I think Peter Thiel takes the monopoly point too far. The word monopoly is loaded and carries too much baggage to be useful. The reality is that the nature of moats is not binary. Moats come in all varieties, from strong to weak. They are always in flux and vary on multiple dimensions. For example, some big moats are more brittle than others. Some moats protect valuable market segments and some do not. In other words, moats can be classified along a spectrum from strong to weak, valuable to non valuable and from big to small. 12. “The informational advantage of brands is hard to beat. And your advantage of scale can be an informational advantage. If I go to some remote place, I may see Wrigley chewing gum alongside Glotz’s chewing gum. Well, I know that Wrigley is a satisfactory product, whereas I don’t know anything about Glotz’s. So if one is $.40 and the other is $.30, am I going to take something I don’t know and put it in my mouth – which is a pretty personal place, after all – for a lousy dime? So, in effect, Wrigley, simply by being so well-known, has advantages of scale – what you might call an informational advantage. Everyone is influenced by what others do and approve. Another advantage of scale comes from psychology. The psychologists use the term ‘social proof’. We are all influenced – subconsciously and to some extent consciously – by what we see others do and approve. Therefore, if everybody’s buying something, we think it’s better. We don’t like to be the one guy who’s out of step. Again, some of this is at a subconscious level and some of it isn’t. Sometimes, we consciously and rationally think, ‘Gee, I don’t know much about this. They know more than I do. Therefore, why shouldn’t I follow them?’ All told, your advantages can add up to one tough moat.” The most important point made in these sentences by Charlie Munger is that the great moats which exist in the world tend to have an aggregate value that is more than the sum of the parts. Munger calls this a “lollapalooza” outcome. Others may refer to it as synergy. As an example, many moats in the technology business are based on what Munger calls an informational advantage, but there can be many other factors like economies of scale or intellectual property that feed back on each other to create and strengthen the moat. I am at ~3,400 words in this post and if you are still reading the probability is good that you understand or soon will understand this critical aspect of investing called “moats.” The opportunities to learn never end. I think is the best game on Earth and that fact explains why Munger and Buffett love what they do so much that they plan to continue to be investors as long as they are physiologically able to do so. Here’s Buffett to finish this post off: “I will say this about investing: Everything you do earn is cumulative. That doesn’t mean that industries stay good forever, or businesses stay good forever, but in learning to think about business models, what I learned at 20 is useful to me now. What I learned at 25 is useful to me now. It’s like physics. There are underlying principles, but now they’re doing all kinds of things with physics they weren’t doing 50 years ago. But if you’ve got the principles, if you know what makes a good business, if you know what makes a good manager, if you know what makes a good product, and you learn that in one business, there is some transference to other businesses.” Mauboussin and Callahan: http://csinvesting.org/wp-content/uploads/2013/07/Measuring_the_Moat_July2013.pdf

Although the term “Blockchain” has really grown in the popular imagination in the last few years, the technology itself is just on 10 years old, being developed in 2008. Currently, the financial services sector offers the strongest use cases for Blockchain technology, although applications of it are growing rapidly in other industries such as transport and agriculture; and professions such as accounting, audit and the law. Table of contents What is Blockchain? Many people confuse Blockchain with bitcoin or digital cryptocurrency. This is not accurate, as cryptocurrency is the best-known deployment of the technology. In fact, Blockchain is so much more. It is defined by Don and Alex Tapscott, authors of Blockchain Revolution (2016) as follows: “The Blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.” In practicality, Blockchain is a continuously growing list of records, called blocks, which are linked and secured using cryptography. Each block contains typically a hash pointer as a link to a previous block, a timestamp and transaction data. Essentially information held on a Blockchain exists as a shared — and continually reconciled — database. By design, Blockchains are inherently resistant to modification of the data contained in the block. By storing blocks of information that are identical across its network, the Blockchain cannot: be controlled by any single entity; have any other than one “single source of truth”; and have no single point of failure. As such, all problems experienced will come from fraudulent or criminal intent and human error, not design flaws in the underlying structure. But why Blockchain (instead of other Technology solutions) for Financial Services? - Many of the industry’s processes are overdue for an upgrade or in some cases complete replacement in order to withstand new volumes, hacks and security threats. Blockchain is far more impregnable and recoverable as no centralized version of this information exists. - Transfers facilitated by central authorities such as banks and clearinghouses have not changed in the last 150 years! An international transfer can still take as long as five days to settle, entailing risks like credit risk, exchange rate risk, etc., and the industry needs to reduce heavy transaction fees and transaction times. Blockchain can make these transfers visible securely immediately, which other technology cannot. - In the future, people are going to make a lot of smaller payments. That’s going to increase economic activity. That, in principle, makes a larger pie with lower fees, higher volumes and a demand for technology that supports it (such as Blockchain). - Blockchain will also enable further disruption of the traditional banks by fintech and non-bank tech players. New entrants, free of legacy problems, could utilize the Blockchain to create a radically cheaper platform for innovation. Banks need to start work with Blockchain technology now in order not to be disintermediated by new entrants. In terms of specific examples of Blockchain applications within banking, several use cases exist already. These include KYC, Payments and Trade Finance and many banks are already piloting Blockchain in these areas: 1. KYC and identity management Know your customer (KYC) requests can cause delays to banking transactions, typically taking days and sometimes weeks to complete. Current KYC processes also entail substantial duplication of effort between banks (and other third-party institutions). While annual compliance costs are high, there are also large penalties for failing to follow KYC guidelines properly. The solution? Banks such as OCBC, HSBC and Tokyo Mitsubishi are already trialing a consortium in Asian markets that operates on a distributed ledger platform. The KYC Blockchain will enable structured information to be recorded, assessed and shared across this network using advanced cryptography. With the customer’s consent, banks will be able to collect, validate and share data efficiently and accurately. The existing international payment system has always been routed through banks and central banks, a process that was first put into place in the 1970s and 1980s. Apart from speeding up money transfers, Blockchain could also help banks to operate continuously, 24 hours a day. This is now increasingly expected by customers who want an omnichannel banking experience at any time day or night The solution? Interbank payments can be made more efficient by using distributed ledger technology. In Singapore, a consortium of local banks plus the Monetary Authority of Singapore (MAS) and BOA Merrill Lynch are prototyping new models to implement decentralized netting of payments encrypted to preserve privacy. Decentralizing the payments queue and consolidating or “netting” the payments used to expose details to third parties in the settlement process. Blockchain has now alleviated that threat. 3. Trade finance The trade finance business includes multiple trading partners and huge amounts of manual records handling, checking and paperwork. This creates delays, duplication and fraud and high levels of inefficiency. It is a sector ripe for a Blockchain revolution. The solution? IBM, UBS and several other international banks (including Caixa, Commerzbank, and Bank of Montreal) have formed a trade finance consortium to create a global trade finance platform based on Blockchain. Blockchain will be used to digitize sales and other legal contracts, allow the location of goods to be monitored and facilitate settlement in close to real-time. This provides a mechanism to link banks, importers, exporters, government agencies, shipping companies, transport operators and insurers. Blockchain is not all that new, however, it is now starting to prove itself beyond just cryptocurrency. It is likely to disrupt financial services first by making existing processes more efficient, secure, transparent and inexpensive. Blockchain then could be the technology that enables banks to introduce new products and services quicker and more cheaply. Finally, it could also enable banks to provide the seamless customer experience, transparency and security at present we can only dream of! Nicholle Lindner (2018, May 10), Applications of Blockchain to financial services: three banking use cases

Ahead of the Energy System Integration and Hydrogen Strategies, different organisations are highlighting the crucial role of renewable electricity-based hydrogen to support a green and job-rich recovery, paving the way for a climate-neutral, inclusive and truly future-oriented EU economy. Now more than ever, Europe needs to prioritise the most efficient, sustainable and cost-effective pathways to decarbonise its economy. Renewable energy, such as wind and solar, not only provide the cleanest and most sustainable energy but have become the most affordable power generation sources overall. Furthermore, renewables accelerate the decarbonisation of the power, heat and transport sectors, with the potential to create numerous and highly-skilled jobs for Europeans. “Renewables are already the most efficient and cost-effective power generation sources in Europe, with leading technologies and applications developed and implemented across the continent,” said Aurélie Beauvais, interim CEO of SolarPower Europe, one of the signatories of the letter. “Now, it is important to complement the efficiency of renewables in directly electrifying final energy uses with renewable-based hydrogen, that provides the missing piece to facilitate the complete decarbonisation of Europe’s energy consumption.” In her view, the upcoming Energy System Integration Strategy and Clean Hydrogen Strategy are an opportunity to unlock clean, renewable hydrogen, that is produced in Europe, so as to deliver on the ambitious goals of the European Green Deal. “Renewable hydrogen not only provides sustainable energy to hard-to-abate sectors but further enhances sectoral integration and has the potential to create millions of local and highly-skilled jobs, contributing to the reindustrialisation of Europe,” she added. Through direct electrification of final energy uses, such as road transport, heating and buildings and industrial processes, renewables provide a proven and scalable solution to achieve the full decarbonisation of over 60 per cent of Europe’s final energy consumption. “Some sectors will need different solutions,” reminded Giles Dickson, CEO of Brussels-based association WindEurope. “This is where renewable hydrogen, produced through electrolysis and based on renewable electricity, comes into play. The EU Hydrogen Strategy marks the starting point for a rapid development of an innovative European electrolyser industry. It is an important element of full energy decarbonisation and will make fossil-based alternatives redundant. A credible Green Deal agenda must build on renewable hydrogen.” Signatories are calling on the European Commission to accelerate the deployment of renewable electricity across these sectors, modernising Europe’s electricity grid infrastructure and driving the electrification of the economy. The sustained deployment of renewables will also enable the production of CO2-free renewable hydrogen, bringing forward the decarbonisation of those sectors difficult to electrify, such as energy-intensive industries and heavy-duty transport. Therefore, signatories urge the Commission to prioritise and support 100 per cent renewable-based hydrogen produced through electrolysis in the frame of the upcoming Hydrogen Strategy and enable the renewable energy sector to play an active role in the EU Clean Hydrogen Alliance.

My answer on Quora: Basic infrastructure enhances economic growth in three broad ways: (1) by supporting the production of goods and services, (2) by connecting people to each other and to those goods and services, and (3) by helping people secure basic needs like food, clean water, housing, health care and quality education (a healthy population is a productive one). Productivity is the Goal Satisfying basic infrastructure needs by itself is not enough to sustain durable economic growth. In the short-run, there may be a boost to demand through infrastructure investment, jobs created, and the learning process associated with going through the experience (infrastructure investments require big money, high risk, and strong commitment). In the longer term, the key is in what a society does with its infrastructure (or “capital stock”)—does it help increase producitivity? Productivity refers to how well the economy absorbs its resources and uses them to provide quality goods and services. In the end, differences in standards of living across economies comes down to differences in productivity. For example, although the U.S. has a large capital stock compared to, say, Malawi, the size of its capital stock as a percent of the size of its economy is roughly similar across rich and poor countries. However, differences in productivity are large and explain the majority of the gap in income per person across countries. In particular, differences in productivity can explain over 90 percent of the difference in GDP per capita between US and Malawi, and around 50–60 percent of the gap between the US and other advanced economies (). Hard and Soft Infrastructure In addition to the size of the ‘capital stock’, the quality of “hard” and “soft” infrastructure can be very different across economies. Hard infrastructure refers to roads, bridges, railways, airports, electricity, water, telecom, office buildings, homes, factories, etc. Quality in hard infrastructure can refer to technologies embedded in these types of assets or in terms of how well they connect different geographies or different value chains. Soft infrastructure refers to norms, clear rules of the road, well-defined property rights, transparent governance structures, accountability, etc. In developing economies, improvements in “soft” infrastructure can go a long way in driving productivity growth. Apublished in 2009 estimated that productivity in China and India could be improved by up to 60 percent by reforming regulations that distort the allocation of resources (like ineffective regulations and excessive bureaucracy). Basic Infrastructure in the Digital Age Technological progress is placing new demands on infrastructure. The explosion of data enabled by the digitization of nearly everything across all sectors—from transportation to health to education to manufacturing—requires an underlying hard infrastructure in telecom, broadband, cloud computing, etc. as well as a soft infrastructure in data rights, privacy, competition policies, cybersecurity norms, etc. Add that to the evolving ways of doing business, changing skill requirements and organization structures for both public and private organizations to succeed in the evolving economy, and it starts to become clear how important the combination of both ‘hard’ and ‘soft’ infrastructure is becoming in the 21st century. Of course, the starting point is a healthy population, so access to clean water, food security, access to quality health care and other basic services should always be a priority. With technological progress, there are more opportunities to secure this kind of basic infrastructure in sustainable ways. Climate Change and Basic Infrastructure Infrastructure plays a central role in our adaptation to and mitigation of climate change—perhaps the single largest threat to humanity. Sustainable infrastructure limits air pollution and the impact on the environment while promoting economic growth and productivity in a way that minimizes our carbon footprint. For more on this, see this report titledby Brookings, the Global Commission on the Economy and Climate, and the Grantham Research Institute at the London School of Economics.

Businesses are increasingly implored to move beyond profit making to solving various social, economic, and environmental challenges in the society and environment where they operate. The phrase responsible business is similar to business concepts like corporate social responsibility, corporate sustainability, sustainable business, corporate citizenship, corporate accountability, corporate social performance, shared value creation, and inclusive business. By definition, “Businesses are responsible when they take into considerations the impacts of their actions on the society. The term responsible business has been defined in many ways but in essence it is businesses taking responsibility for their impacts on the societies, environment and value chain in which they operate.” Why Should Businesses Be Responsible? Building socially responsible businesses is vital now than ever before. As the most respected, successful, and desirable businesses hold such positions because they do not only make profit but use their capacity to solve societal and environmental issues. Being responsible through your company’s strategy, policies, and operations assures both short- and long-term benefits. Below are some of the benefits businesses can derive from being responsible in their operations. Long Term Success of the Business – Businesses whose focus expands beyond making profit to solving socio-environmental issues around them are in for a long term existence. Being responsible as a business creates a win-win situation. For instance, a business that takes up a social project to strengthen the infrastructure (roads, rail, manpower etc.) in its supply chain would inadvertently benefit in the long term from improvements to systems and processes. The goodwill and brand preservation arising from positive social impact in the operating environment is also pertinent to the long term success of the business. More Profit and Business Growth – Profitability is another important reason for businesses to be more responsible. Simply put, responsible business practices create a competitive advantage for the business.Even where it may seem to cost more in the short term, customers and employees tend to stay loyal to such businesses. When businesses provide healthy and safe working environment for their workers and emphasize good work-life balance, the resulting benefits include: (1) talent retention and dedication; (2) employee productivity, (3) increased brand reputation, customer loyalty, and overall business profit. Market Access and Investment Incentives – Showing your products have been produced under the right condition gives way for a marketing and sales advantage to gain larger market share . Businesses that have been involved in irresponsible practices lose their brand credibility and in many cases quickly start experiencing a drop in profits. Potential funders and partners today are more conscious of environmental, social, and governance risks. Hence investors prefer ventures that are sustainable and responsible in their business outlook and operations. These investors want to know that your business practices would preserve and uplift both their brand and yours. The steps needed to ensure you are running a responsible business may not be easy at first but following and abiding by the principles of sustainable business will pay-off in the long run. By way of a general guideline, businesses can develop responsibility by - Engaging with the communities where they operate; - Contributing to the protection of the environment by reducing their negative footprints; - Promoting and advocating for workforce diversity; and - Developing socially responsible products and services. Businesses leaders have to recognize that the longevity and success of their businesses depends on their communities, employees, and the environment in which they operate. These major determinants have to be treated as stakeholders. Join us on October 4-5, 2018 as we as navigate how we can contribute to accelerating positive change and growth on our continent at the inaugural Africa Responsible Business Forum (ARB Forum). Registration has commenced at http://lbsarbforum.edu.ng/ Learn more from: - Idemudia, U. O. (2011), Corporate social responsibility and developing countries: moving the critical CSR 73 How Responsible is Responsible Business? research agenda in Africa forward. Progress in Development Studies, vol.11(1), pp. 1–18. - Visser, W. (2008), Corporate Social Responsibility in Developing Countries. Ch 21 in: Crane, A. McWilliams, A. Matten, D. Moon, J. Seigel, D. (eds.) The Oxford Handbook of Corporate Social Responsibility, Oxford: Oxford University Press, pp. 473-479 - Wood, D. T. (1991) Corporate Social Performance revisited. The Academy of Management Review, vol. 16(4), pp. 691-718. - Porter, M. E. & M. R. Kramer (2011), Creating Shared Value. How to reinvent capitalism and unleash a wave of innovation and growth. Harvard Business Review January–February - Wright, L.; Kemp, S.; Williams, I. (2011). “‘Carbon footprinting’: towards a universally accepted definition”. Carbon Management. 2 (1): 61–72. doi:10.4155/CMT.10.39

Here we will explain what 89 basis points means and show you how to convert 89 basis points (bps) to percentage. First, note that 89 basis points are also referred to as 89 bps, 89 bibs, and even 89 beeps. Basis points are frequently used in the financial markets to communicate percentage change. For example, your interest rate may have decreased by 89 basis points or your stock price went up by 89 basis points. 89 basis points means 89 hundredth of a percent. In other words, 89 basis points is 89 percent of one. Therefore, to calculate 89 basis points in percentage, we calculate 89 percent of one percent. Below is the math and the answer to 89 basis points to percent: (89 x 1)/100 = 0.89 89 basis points = 0.89% Shortcut: As you can see from our calculation above, you can convert 89 basis points, or any other basis points, to percentage by dividing the basis points by 100. Basis Points to Percentage Calculator Use this tool to convert another basis point value to percentage. 90 Basis Points in Percentage Here is the next basis points value on our list that we have converted to percentage.

Sitting bedside with her husband after his stroke, Jane is talking with the discharge planner for the local hospital. After discussing the level of care John will need, Jane and the planner have decided that the nursing home connected with the hospital is the only viable option for John’s needs. Now Jane needs to visit the nursing home and discuss how she will pay for John’s care. The following day, Jane stops by the nursing home hoping to get a tour of the facility. Upon walking in, she is immediately impressed by the comfort, care, and especially the staff. The facility is bright and welcoming and the staff is both highly attentive and respectful. After her tour, Jane is absolutely certain that John should be admitted to the nursing home when he is discharged in two days. After the tour, Jane sits down with the social worker and business office manager for the nursing home in order to fill out the admissions paperwork. Jane fills out the paperwork while the manager explains the billing process, including the facility’s $200 per day rate. Jane immediately stops writing and looks at the employees in shock. You see, Jane can’t afford $200 a day with just the Social Security she and John receive. The social worker reassures Jane that, according to the discharge planner, Medicare will pay for John’s care for immediately after he moves from the hospital to the nursing home. Unfortunately, though, Medicare doesn’t pay for all nursing home care. Eventually, John will stop improving or Medicare’s 90-day limit will run out, and Jane will need to pay the bill somehow. Jane immediately sees the problem with the calculation the social worker did: it assumes she is spending all their money on John and using nothing to care for herself! For every dollar she spends on food, fuel, utilities, or repairs, that number shrinks. The business manager responds that John can apply for Medicaid once Jane has spent all the money. The social worker helps Jane fill out a financial statement identifying what Jane believes their assets to be. Looking at their joint checking account, John’s IRA, the value of the home they own together, and the 40-acre farm Jane inherited with her three other siblings, the social worker believes Jane will be able to pay for John’s care for about 56 months if she sells the farm and liquidates John’s IRA. Jane is dumbfounded. Until John’s stroke, she had never considered that nursing home expenses could wipe out everything they have worked their whole lives to earn, and now her mind is spinning out of control: “Why doesn’t all the money they contributed to Medicare over their combined 85 working years get them health insurance coverage for the nursing home? They’re not that old! I can’t afford to support myself for the next 15 or 20 years if I have to spend everything on John’s care. I can’t sell my farm! My siblings will never go along with that, and it wouldn’t be fair to them.” Fortunately for Jane and John – and you, if you find yourself in this situation! – there is a solution to the problem. When she gets home, Jane does a Google search for “how to pay for a nursing home” and discovers an elder law attorney in her area who specializes in planning for nursing home stays. After a quick phone conversation with the staff at the law office, Jane already feels like someone is going to fight for John and for her. After first meeting with the lawyer just two days later, Jane knows there’s a solution that fits their needs. Jane leaves the lawyer’s office and heads straight to the hospital with a spring in her step. Even though John is moving to the nursing home that same day, Jane has virtually no stress. She knows John will get the best care he can get, and she knows exactly where the money will come from to pay his bills. Even the discharge planner at the hospital notices how relaxed Jane is. When they arrive at the nursing home, Jane sits down with the social worker and the billing coordinator to discuss Jane and John’s ability to pay the nursing home bill. When Jane informs them that she hired a long-term care planning expert to help make sure John’s care is completely paid for, the social worker tells her they have everything they need to admit John to the nursing home: “We’ll contact your lawyer to make sure everything is sorted out. You focus on taking care of John and spending time with him.” This is a true story. Okay, it’s really a combination of many stories: our clients often have too much money to apply for Medicaid immediately but not enough money to support a spouse who doesn’t need nursing care. Like Jane, they might have an inheritance that they can’t sell because it’s owned jointly or a life’s savings that they believe should be preserved. If this is you or if your parents are like John and Jane, you need a long-term care planning expert to help you navigate the difficult waters of Medicare, Medicaid, VA benefits, and long-term care insurance. Contact our office at (712) 737-3885 to start building your long-term care planning solution today.

For years, millions of concerned citizens have been working hard to promote a clean environment. Until now, climate change and pollution were our biggest concerns. However, now we are faced with uncertainty due to the COVID-19 pandemic. Due to the COVID-19 crisis, thousands of Americans who work in the clean energy field have lost their jobs, while thousands of others are at risk of losing theirs as well. Nearly 80% of solar companies have delayed or cancelled solar projects, according to a current SEIA survey which noted that business has reduced worldwide as well due to the global pandemic. Worldwide reports are indicating that the Coronavirus outbreak has drastically reduced solar deployment forecasts for at least the next few years. COVID-19 impacts have reduced the forecast for Bloomberg New Energy Finance by as much as 28%. A study by Wood Mackenzie Power & Renewables indicates that the market has fallen by 18% already this year. A marked reduction in solar energy deployment would cause a setback in the battle against climate change. As reported by the United States Environmental Protection Agency, for years the highest donor of greenhouse gases in the U.S. has been the electric power sector, with a contribution of 27% of total emissions. With installed solar capacity of 77 gigawatts in the U.S. alone, solar energy plays a crucial role in reducing emissions from the power section. This equates to approximately enough power for over 14.5 million homes as well as an offset of carbon dioxide emissions of greater than 88 million metric tons per year. This decade has been coined the Solar+ Decade, supporting the idea that clean energy, renewed infrastructure, storage and, most importantly, solar energy, are creating jobs, boosting the economy in the effort to create a healthier and clean environment. This coincides with Denis Hayes, the creator of Earth Day’s, vision of a Green Earth. Congress needs to act quickly to halt the catastrophic fallout of COVID-19 in order to foster the growth and recovery of the solar industry as well as maintaining the key components of Earth Day. The Solar ITC (Investment Tax Credit) is a crucial clean energy policy that allows solar companies to completely employ the direct payments received from the ITC to help businesses remain unsettled while keeping their employees on their payroll in these trying times. The expansion of economical solutions from prior recovery bills and the development of new incentives for U.S. manufacturing, as well as new online permitting programs can also help boost the U.S. solar industry.

Corporation vs S Corporation: Everything You Need to Know Corporation vs S corporation is a comparison that many entrepreneurs have to make when they are choosing a legal structure for their businesses. 3 min read 2. Advantages and Disadvantages of a C Corporation 3. What Is an S Corporation? 4. Advantages and Disadvantages of an S Corporation Corporation vs S corporation is a comparison that many entrepreneurs have to make when they are choosing a legal structure for their businesses. These two types of corporations have their pros and cons, which should be carefully weighed before making the final decision. What Is a C Corporation? A C corporation is the default business structure for a corporation. Unless your corporation has an “S” classification, it will be regarded as a C corporation. Normally, the owners of a C corporation are individual shareholders, which makes the corporation a separate legal entity. As such, a corporation offers personal liability protection for its owners. In other words, the shareholders of a corporation are not personally liable for its debts or liability. While the shareholders make decisions regarding the company's important policy issues, the task of handling business issues is left in the hands of the board of directors. Officers such as CEOs, CTOs, and COOs are in charge of the company's day-to-day operations. If you wish to elect C corporation status, you are required to submit certain documents to your state government. Typically, these documents include the articles of incorporation. After you have set up your corporation, you must fulfill certain documentation obligations and other requirements, such as issuing stock, holding shareholders' and directors' meetings, and paying fees. Advantages and Disadvantages of a C Corporation The advantages of a C corporation include: - Limited liability – A C corporation has limited liability that protects its shareholders, directors, officers, and employees from its debts and obligations. - Perpetual existence – A C corporation exists perpetually in that it will continue to exist even if the original owner has left the company or passed away. - No shareholder limit – A C corporation is allowed to have as many shareholders as it wishes, as well as foreign shareholders. - Easier to raise funds – Since it can issue multiple stock classes to any number of shareholders, a C corporation can raise funds more easily. - Tax benefits – A C corporation can claim a tax deduction for the fringe benefits it provides its employees, such as health and disability insurance. Likewise, the disadvantages of a C corporation include: - Double taxation – A C corporation is required to pay taxes on its income at the corporate level and again at the individual level after the income is distributed to its shareholders as dividends. Additionally, the shareholders cannot deduct losses on their personal income statements. - Regulatory compliance – A C corporation has to deal with a more complicated structuring process, which typically involves creating organizational resolutions, electing a board of directors, issuing stock, and others. C corporations must also meet strict compliance requirements after formation. What Is an S Corporation? Similar to a C corporation, an S corporation is owned by shareholders who are responsible for making high-level decisions. An S corporation also has a board of directors who determine the direction of the business and officers who handle its day-to-day operations. In addition, an S corporation also offers liability protection for its shareholders and has the same compliance and documentation obligations. Advantages and Disadvantages of an S Corporation S corporations offer many advantages, such as: - Limited liability – Similar to a C corporation, an S corporation protects its shareholders, directors, executive officers, and employees from being personally liable for its debts and obligations. - Pass-through taxation - An S corporation differs from a C corporation in that it is a pass-through tax entity and therefore not required to pay taxes on the company's income twice. - Perpetual existence – An S corporation also exist perpetually, regardless of whether the original owner is still with the company. - Tax-deductible losses – In an S corporation, owners can deduct their business losses on their personal tax returns. - Investment opportunities – An S corporation can grow its business by attracting investors and issuing shares of stock. The disadvantages of an S corporation are: - Limited ownership – Unlike a C corporation, an S corporation can have a maximum of only 100 shareholders. Also, the shareholders must be legal U.S. residents. - Greater tax scrutiny – In an S corporation, payments to shareholders and employees can be distributed as salaries or dividends. Since they are taxed differently, the IRS keeps a close eye on the company's tax filings. - Regulatory compliance – An S corporation also has a more complex structuring and organizational process and required to meet strict compliance and documentation obligations throughout its existence. If you need help choosing between a C corporation and S corporation, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.

Recently an expert panel comprised of academic and business leaders from around the world gathered to discuss ideas of how to finance the U.N.’s Sustainable Development Goals. While an exact figure on the financing needed to achieve the SDG’s has been elusive, it is widely suggested to require a movement from “billions to trillions”. Given the existing challenges in this area, the question is, where is the money coming to come from? While the role of the private sector has been controversial, many argue that attaining the necessary financial muscle can’t be done without diversifying the funding framework. The following is a list of the 7 main ideas that the panel agreed upon: - Get everyone (every country) on board. - Focus on domestic resources. - Recognize the importance of the private sector. - Make sure everyone is accountable. - Consider large scale public financing in the form of grants. - Find the appropriate source of finance for each goal. - Remember that one size (financial strategy) does not fit all. For the full article:

Traditionally, monetary policy and financial regulatory policy are treated as distinct subjects. One is, fundamentally, a branch of macro–economics, the other a rather applied branch of microeconomics. One is concerned with money supply, the other with the safety and soundness of banks. In part I, however, we argued that monetary policy affects the level of economic activity through its impact on the supply of credit, mediated through the banking system. We analyzed how changes in policy – from open market operations to reserve requirements to capital adequacy standards – affected banks' incentives to lend and the constraints they face (their opportunity set). We showed that both traditional monetary instruments and regulatory provisions affected the incentives and constraints of banks. Monetary policy and financial regulatory policy are intertwined: both are relevant both for the level of aggregate economic activity and for the safety and soundness of the banking system. And just as monetary policy often went awry because of its failure to focus on how monetary and regulatory policies affected bank behavior, so too, as we shall see in this chapter, has regulatory policy often been misguided. The analysis of regulatory policy must begin with an analysis of how various regulations affect banks' behavior, and that must rest on an analysis of how the incentives and opportunity sets (constraints) are altered.

TDS, or “Tax Deducted at Source”, is a certain percentage of one’s monthly income which is taxed from the purpose of payment. In keeping with the revenue enhancement Act, 1961, every individual or organisation is vulnerable to pay taxes if their income is above a specific threshold. TDS deduction – when and by whom: The Tax Deducted at Source must be deposited to the govt by 7th of the next month. In detail, TDS deducted within the month of June must be paid to the govt by 7th July. However, the TDS deducted within the month of March will be deposited till 30th April. A person making specified payments mentioned under the tax Act are required to deduct TDS at the time of creating such specified payment. But no TDS needs to deducted if the person making the payment is a private or HUF whose books don’t seem to be required to be audited. Steps to deposit TDS: Online Mode:TDS is Deposited through the official website of NSDL. • Login TIN NSDL PORTAL • Select the relevant challan • Fill within the challan details • Confirm challan details • Make TDS payment • Online verification Physical Mode: By furnishing the Challan 281 in the authorized bank branch TDS return filing: Filing Tax Deducted at Source returns is mandatory for all the persons who have deducted TDS. TDS return is to be submitted quarterly and various details need to be furnished like TAN, amount of TDS deducted, type of payment, PAN of deductee, etc. Also, different forms are prescribed for filing returns depending upon the aim of the deduction of TDS. Form 16, Form 16A is TDS certificates of deducting tax at source and issued on deduction of tax by the employer on behalf of the staff. These certificates provide details of TDS / TCS for various transactions deductor between and deductee. Form 26AS in TDS: It’s a form that indicates that the tax that has been deducted has also been deposited with the govt. It also reflects details of advance tax/self-assessment tax and high-value transaction entered into by the taxpayer. Form 26As is a statement that provides details of any amount deducted as TDS or TCS from various sources of income of a taxpayer. Note: It is advisable while filing your e-return (ITR) to upload a pdf format of your form 16 for your fast processing of ITR. For more details, please visit All India ITR

Accounting is really a broad subject which encompasses many facets of a company along with the finances of people. Accounting topics vary from bookkeeping, cost accounting, fixed asset accounting, tax accounting, auditing, and much more. But accounting isn’t just about records into a cpa system. It calls for may other aspects not typically connected with accounting. A great accountant not just prepares fiscal reports, balances sheets, along with other reports for companies. They take part in a number of other areas that are typically considered talking to in the many forms. Accountants many occasions will offer you services for example writing a strategic business plan, creating a company succession plan, asset protection, fraud prevention, recognition and analysis and tax preparation for corporations, partnerships, LLCs, estates, trusts along with other entities. They’re involved many occasions in auditing the fiscal reports of companies. They may be involved with developing a buy-sell agreement, financial planning and other associated topics. Accountants typically are college grads having a minimum of a bachelor’s degree, usually in accounting or perhaps a related field. Many will continue to get yourself a master’s degree running a business Management, Accounting, Forensic Accounting and other associated levels. Some will continue to educate at schools, universities, and colleges. Some start their very own business and lots of occasions achieve this we have spent for whether public accounting firm or operate in private industry. Some become Cpas (CPAs) who is able to issue opinions around the fiscal reports of companies. Not every accountants are CPAs nor could they be needed to become a CPA. Within the next 15 days and much more you will see articles about accounting, but the various talking to related services many accountants offer. Sometimes accountants take part in personal bankruptcy situations and therefore are held by strict rules set through the personal bankruptcy laws and regulations. While they are well-known topics, the articles being presented here will offer you details about a few of the more profitable talking to fields that accountants, tax preparers along with other business consultants might want to consider going after. They are attempted and proven talking to services that generate various levels of revenue. Some require great levels of training others require training that’s a shorter period consuming. Whichever way an advisor desires to go, useful required by watch in a single form or any other. Finding out how to offer these types of services is going to be very advantageous to business clients for consultants. Learning these types of services may benefit your company or personal financial existence will be provided within the articles. A few of these services need a degree others don’t. Together with offering this content, you ought to take part in discussion forums to inquire about questions regarding any accounting or financial subject. If the accounting student desires to ask an issue, a solution is going to be provided. However, no homework questions is going to be permitted or clarified. Additionally, you will see articles in regards to a new designation for consultants that will become extremely popular within the next couple of years. The designation is Certified Business, Accounting and Tax Consultant (CBATC). Accounting is a profession comprised of individuals of walks of existence. Individuals interested in this subject should think about a university education with a minimum of a BS in accounting. In lots of states it’s possible to take the CPA exam regardless of whether you attended a physical school or online. It is really an exciting field and if you possess the aptitude and need to get a cpa, then go ahead and you need to think twice about the area.

[pic] PART A INTRODUCTION OF THE REPORT [pic] [pic]1: Introduction [pic] 1. BACK GROUND OF THE STUDY [pic] Bank is a financial institution whose main aim is to earn profit through exchange of money and credit instruments. A banking company must perform both of the essential function accepting of deposits and lending or investing the same. If the purpose of acceptance of deposits is not to lend or invest, the business will not be called banking business. It may be said that banking in its most simple form, is as old as authentic history. As early as 2000 B. C. Bany Lonians has developed a system of banks. In ancient Greece and Rome the practice of granting credit was widely prevalent. According to some authorities the word “Bank” is derived from the words banco, bancus, banque or bance. All of these words mean a bench upon which the mediaeval European bankers used to sit with their coins to transact banking business. When a banker failed to meet his obligations, the angry people used to break up his “banco”. The account for origin of the word “Bankrupt” which means bank failure but whatever be the origin of the bank, the word came to be used in Europe from the middle age in connection with the business of bank. Money also links the history of banking. It created a logical necessity of banks. However, the birth of present day banking is not sudden. It has come to its present stage through a process of development. During the last decade, banking became the most competitive industries of Bangladesh with a huge amount of growth. A large number of new banks have made their way in the industry and yet there are more to come. In such a highly competitive service industry, ‘customer satisfaction’ is a very important factor to consider. High customer atisfaction and loyalty give an organization a better base than its competitors and allows it to flourish in the industry. 2. OBJECTIVE OF THE STUDY [pic] General Objective The general objective of preparing this report is to fulfill the requirement of project work as well as completion the BBA Program through gaining the experience and view the application of theoretical knowledge in the real life. Also find out the Operational Process of the Bank and it’s overall Performance. Project Objective The objectives of this report are the followings: Get introduced with the idea of “Customer Service Quality” in Bank Asia Ltd. ? Introduce with the Bank service quality assessment tools ? Techniques to win a strong customer base ? To know the expectations of customers of Bank Asia Ltd. ? To analyze different activities of different desk. ? To analyze different rules and regulations of the Banking System. ? To analyze the procedures of making loan. ? To analyze how to provide better customer service. ? To analyze how bankers introduce their product to the clients and customers. To know how people communicate with clients, customers and head office about different purposes and how they use information system. ? To Know the position of Bank Asia Ltd in the Market ? To know the study’s and conditions of overall performance ? To make some recommendations and conclusion to further the development of Retail products of Bank Asia Ltd. 1. 3 Methodology of the study [pic] To make the report more meaningful and presentable, two sources of data and information were used widely. Both primary and secondary data sources were used to prepare this report. The nature of this report is descriptive with some survey or using sampling method. Most of the necessary information has been collected by a questionnaire, officers working in Retail Banking. 1. 4 DATA COLLECTION [pic] Both the primary and secondary forms of data are used to make the report more rich and informative. The details of these sources are gives below: Primary Sources ?? Most of the information was acquired by discussing with the officers working in the Patherhat Branch of Bank Asia Ltd. ?? Observation and work experience with different divisional in-charges and suggestions of many executives of the bank. Secondary Sources ?? Annual Report of the Bank Asia Limited. ?? Various books, articles, compilations etc. ?? Websites of the Bank. ?? Instruction circular of Head Office, brochures of different banks, newspapers and magazines regarding banking issues, seminar papers and so on. 1. 5 LIMITATIONS [pic] The report was not free from limitations. The study has been conducted on the subject of “Activities in Bank Asia Limited”. The Officers of Bank Asia have provided all the necessary information with his best abilities. Key limitations of the study are as follows: The internship is a very short period of time. During this short period it is very difficult to study about Bank Asia properly. ? The data and information collected from Bank Asia was not clearly related with the topic. ? The study was not successfully completed due lack of knowledge of banking profession. ? Some data and information was not provided by Bank Asia due to maintain secrecy. ? The data that are collected contained lots of information so it is very difficult to represent all information concisely. ? Bank is a very busy organization with comparison to others. There are rushes of people for about whole the day and the officers have to transact with them. So it is very much tough for Credit Officers to allocate time for me. [pic] PART B COMPANY PROFILE [pic] [pic]2: COMPANY PROFILE [pic] 2. 1 ABOUT BANK ASIA [pic] Bank Asia is one of the renowned and successful banks in Bangladesh established in 1999. The paid up capital of the Bank is 1116 million. With in very short time Bank Asia has established itself as one of the fast growing local private Bank. Now it has 66 branches in its network. It has own ATM service. It provides ATM service through other banks too. Mr. A. Rouf Chowdhury is the Chairman of Bank Asia. Bank Asia is operated by the experienced, qualified, professional management teams whom have exposure in the international market. In the year 2003 the Bank again came to the limelight with over subscription of the Initial Public Offering of the shares of the Bank, which was a record (55 times) in our capital market’s history and its shares commands respectable premium. Bank Asia is maintaining it’s competitiveness by leveraging on its Online Banking Software and modern IT infrastructure. It the pioneer amongst the local Banks in introducing innovative products like SMS Banking and under the ATM Network the Stelar Online Banking Software enables directs linking of a client’s account, without the requirements for a separate account. Bank Asia has long experience in the financial sector of our country. By their programmatic decision and management directives in the operational activities, the Bank has earned a secured and distinctive position in the banking industry in term of performance, growth and excellent management. 2. 2 CORPORATE INFORMATION[pic] ? Letter of intent received : 24/02/1999 First meeting of the Promoters held: 15/04/1999 ? Certificate of incorporation received: 28/09/1999 ? Certificate of commencement of Business : 28/09/1999 ? First meeting of the board of Directors held: 01/10/1999 ? Banking license received : 06/10/1999 ? First branch license received: 31/10/1999 ? Inauguration of Bank : 27/11/1999 ? Date of publication of Prospectus : 29/06/2003 ? Date of IPO Subscription : 23/09/2003, 24/09/2003 ? Date of first share trading in Bourse : 08/01/2004 ? Date of agreement with CDBL : 20/12/2005 ? Date of first scrip less trading : 30/01/2006 Numbers of Promoters: 22 ? Numbers of Directors: 11 ? Numbers of Branches : 66 ? Auditors : S. F. Ahmed &CO. Chartered Accountants House #25, Road # 13A, Block- D, Banani, Dhaka- 1213. ? Registered Office: Tea Board Building (1st floor) 111-113, Motijheel C/A, Dhaka – 1000, Bangladesh. 2. 3 MANAGEMENT HIERARCHY OF BANK ASIA LIMITED [pic] 2. 4 MISSION STATEMENT OF BANK ASIA [pic] To assist in bringing high quality service to our customers and to participate in the growth and expansion of our national economy. To set high standards of integrity and bring total satisfaction to our clients, shareholders and employees. To become the most sought after bank in the country, rendering technology driven innovative services by our dedicated team of professionals. 2. 5 VISION OF BANK ASIA [pic] Bank Asia’s vision is to have a poverty free Bangladesh in course of a generation in the new millennium, reflecting the national dream. Our vision is to build a society where human dignity and human rights receive the highest consideration along with reduction of poverty. 2. 6 COMMITMENT & CULTURE OF BANK ASIA LTD. pic] 2. 6. 1 Social Commitment: Though the purpose of Bank Asia is obviously earning profit, but the promoters and equity holders are aware of their commitment to the society to which they belong. 2. 6. 2 Corporate Mission: • To provide high quality financial services in export and import trade. • To provide excellent quality customer service. • To maintain corporate and business ethics. • To become a trusted responsibility of customer’s money and their financial advisor. • To make their stock superior and rewarding to the customers/ share holders. • To display team sprit and professionalism. To have a sound capital base. 2. 6. 3 Corporate Culture: Bank Asia is one of the most disciplined banks with a distinctive corporate culture. Here we believe in shared meaning, shared understanding and shared sense making. Our people can see and understand events, activities, objectives, objects and situation in a distinctive way. They mould their manners and etiquette, character individually to suite the purpose of the bank and the needs of the customers who are of paramount to us. The people in the bank see themselves as a tight knit team/ family that believe in working together for growth. The corporate culture we belong has not been imposed; it has rather been achieved through our corporate culture conduct. [pic]3: TECHNOLOGY AND INNOVATION [pic] 3. 1 DELIVERY CHANNEL [pic] Focusing of the need for increasing customer’s service delivery point Bank Asia has been continuously adding new items. Their delivery channels now include 32 branches one booth, ATMs, internet banking, POS machine of Dutch Bangla Bank Ltd. and mobile banking. 3. 2 BRANCH NETWORK [pic] Bank Asia intends to achieve to attain balanced growth and expansion of its branch network. Aiming to extend their service and to increase their reach rapidly to their growing and valuable clients. Bank Asia always looking for opportunities for adding more branches to their growing network. 3. 3 ATM [pic] Bank Asia’s ATM Service has been well embraced by the clients since it provides them most flexibility in handling cash money and ensures uninterrupted banking facilities round the clock. In the face of growing demand they arranged for addition of new ATMs and set up 10 additional machines during the year 2007. Now they have ATMs of their own also they have under share arrangements 93 ATM E-cash booths and 226 ATMs of Dutch Bangla Bank Ltd. 3. 4 INTERNET BANKING [pic] Internet banking facilities change their business process, since many customers fell comfortable to execute transaction through internet. The transaction through internet has grown very fast in the recent year. Their internet banking further improved in 2007 and their customer can change their profile, stop payment of issued cheques, see the status of cheques, request a cheque book etc. n addition to existing facilities like fund transfer, balance and transaction enquiry etc. 3. 5 CREDIT CARD FACILITIES [pic] Bank Asia now provides credit card to its customers and clients. Through this card a client can draw money from any bank. [pic] PART C GENERAL BANKING(AN OVERVIEW) [pic]4: GENERAL BANKING (AN OVERVIEW) [pic] 4. 1 Banking Service of Bank Asia Ltd. [pic] Banking Services General Banking Credit/Advance Foreign Exchange CashCash Credit (HYPO)Import AccountsCash Credit (PLEDGE)Export RemittanceCash Credit SchemeRemittance Clearing House Lease Financing Customer Service Saving Overdraft 4. 2 CUSTOMER SERVICE[pic] Accepting Deposit: There are three kinds of deposits in Bank Asia those are as follows: a) Demand Deposit. b) Time Deposit. c) Scheme Deposit. a) Demand Deposit: The deposit from which depositors can withdraw money without any notice is demand deposit. These demand deposit also three categories those are as follows: 1) Current deposit (CD Account). 2) Saving Deposit (Saving Account). 3) Short Term Deposit (STD Account). b) Time Deposit: This deposit is called FDR (Fixed Deposit Regular). The amount in this account is payable only after time stipulated. There are three types of time deposits those are as follows: FDR # One Month 10% # Three Month 12. 5% # Six Month 12. 5% # One Year 12. 5% # BASP 14% C) Scheme Deposits: With the growth of the middle classes and classes of people having a monthly and regular source of income, from which people deposit a specific amount in the Bank at a regular interval of time, is called Scheme Deposit. The following accounts are under Scheme Deposit A/C: 1. Deposit pension Scheme (DPS),2. Monthly Saving Scheme (MSS), 3. Monthly Income Scheme (MIS), 4. Super Saving Scheme (SSS),5. Multi plus Saving Scheme (MPSS). 4. 2. 1 ACCOUNTS OPENING PROCEDURE [pic] To open a new account an applicant has to maintain number of formalities. Bank’s officer also is careful whether necessary documents are provided by the new account opener. To open a new account following formalities have to be maintained: ? An introducer who introduces new account holder to the bank. ? Two copies of passport size recent photograph attested by the introducer. ? Account opening form duly filled. ? Signature card duly signed. One copy of photograph of nominee. ? After fulfilling the above formalities, Bank provides to the customer a deposit slip book and a cheque book which is marked by his new account number. ? If it is joint account each and every person has to provide their details and signed into the account opening form. ? Letter of thanks to the account holder and introducer For Partnership firm: If it is a Partnership firm there is some additional formalities have to be maintained, those are as follows: ? Partner’s signature ? Partner’s name and address. ? The nature of the firm’s business Two copies of photograph for each and every partner, duly attest by the introducer. ? Account must be introduced properly. ? Introducer’s signature on account opening form has to verify by an officer under full signature. ? Certified true copy of the memorandum of the firm. ? Registered partner ship deed. ? In case of joint account, operational instructions are to be signed by the joint account holders. For proprietorship business: ? Declaration of proprietorship ? Photocopy of Business trade license. ? Account agreement form. ? Photocopy of TIN certificate. For Limited Company: Certified true copy of Memorandum & Articles of Association of the company. ? Latest audited balance sheet of the company. ? Latest copy of company’s income statement. ? Certificate copy of incorporation of the company for inspection and returned with a duly certified photocopy for bank’s record. ? Certificate from the registered of the joint stock companies that the company is entitled to commence business (in case of public limited co. for inspection and return) along with a duly certified photocopy for bank’s record. ? Name and address of the board of directors. ? Authorized signature. Extra resolution of the board, general meeting of the company for opening the account and authorization for its operation duly certified by the Chairman/ Managing Directors of the company. ? Full name of the company and full address of head office. General condition for opening current and saving account: ? At least Tk. 2,000/- for current account and Tk. 1,000/- for saving account has to deposit while account is going to open. 4. 2. 2 ISSUE OF DUPLICATE CHEQUE BOOK [pic] When an account holder loss his cheque book he has to inform it to the bank. Then bank stop any amount from that account. Account holder has to apply to the bank through application to new cheque book. Then fresh cheque book is issued instead of lost one after verification of the signature of the account holder from the specimen signature card and on realization of required exercise duly only with prior approval of manager of the branch. Cheque of the new cheque book is recorded in the ledger card and signature card ass usual. Series number of lost book is recorded in the stop payment register and caution should be exercised to guard against fraudulent payment. 4. 2. 3 CLOSING OF AN ACCOUNT [pic] There are some reasons for which account may be closed those are as follows: ? If the customer is desirous to close the account. ? If the bank finds that the account is inoperative for a long duration. ? If garnishee order is issued by the court of Bank Asia. ? To prevent money laundering some times Bangladesh Bank order to the bank to close the account of the black money holder. To close the account, the cheque has to be returned to the bank. Bank Asia takes all the charges by debiting the account and remaining balance is then paid to the customer. Necessary entries are given to the account closing register and computer. . 2. 4 ISSUING OF PAY ORDER [pic] A pay order is an instrument from one branch to another branch of the same bank to pay a certain sum of money to the person there on or to his order. Unlike the cheque, there is no possibility of dishonoring pay order because before issuing PO, bank takes the money of the pay order in advance. The pay order purchaser has to apply in a prescribed form with a credit voucher for the amount of pay order and other credit vouchers for commission and VAT. 4. 2. 5 TELEGRAPHIC TRANSFERS (TT) [pic] TT is the quickest method of transferring funds from one place to another. The remitting branch sends a telegraphic/ telephone message to the other end, to pay a certain sum of money to a named payee. Such a message is usually sent in code language. Prefixing or suffixing a check cipher authenticates the message. A check cipher for a remittance is worked out on a test key table, access to which is allowed only by authorized officers. The codebook is always kept in the custody of authorized officers. All T. T. are following by written confirmations under the signature of authorized officer of the remitting branch. The receiving branch, after thoroughly checking the telegraphic message, acts on it. . 2. 6 ISSUING CERTIFICATE [pic] Bank Asia provides different certificates to its clients and customers. It provides Bank Certificate to its clients for opening BO account and deduct Tk. 200/- as service charge. Bank Asia provides solvency certificate too to prove that their client is financially solvent. This solvency certificate is needed if client is willing to go to abroad or opening new business. 4. 3 ACCOUNTS DEPERTMENT [pic] Following things are done by the Accounts Department: ? Pass outward instrument to the clearing house. ? Pass inward instrument to respective department. Return instrument in case of dishonor. ? Prepare OBC and IBC for the respective branch and head office. ? Verify daily’s cash expenses and issuing cash voucher sleep for different necessary daily expenses. ? Issuing credit voucher for remittance coming from abroad. ? Receiving clearing cheque from teller department and bank wise separate the cheques and send those to the clearing house. ? Recording of return cheque from different banks and back to return it to the clients. ? Prepare OBC request letter to head office for collecting fund out side of the city. The following entries are given if the cheque is honored. Customer A/C Debit Bank Asia general A/CCredit Bank Asia Principle Branch clears its cheque through the head office as well as the cheque of other branches, because it is only permitted. The other branches send the instrument through IBCA. Bank Asia principle branch act as an agent in this case. For this the concern branch gives the following entries: Bank general A/C Debit Customer’s A/C Credit If the instrument is dishonored, the instrument is returned to the concerned branch through IBCA along with the following entries: Incase of return for inward instrument. Bank general A/CDebit Customer’s A/CCredit Incase of return for outward instrument: Customer A/C Debit Bank general A/CCredit Incase of returning an instrument the respective officer usually looks for following reasons: ? Insufficient fund ? Drawer’s signature differs. ? Amount in word and figure differ ? Refer to drawer ? Stop payment ? Not arrange for ? Effect not cleared may be presented again. Receiving cheque for collection: In Bank Asia, cheques of its customers are received for collection from other banks. In case of receiving cheque, following points should be checked. ? The cheque should not carry a date older than the receiving date for more than 6 months. In that case it will be a ‘stale cheque’ and it will nit be allowed for collection. Again the date of the cheque should not be more than one day forward than the receiving date. ? The amount in figures and words in both sides of the pay-in-slip should be same with the amount mentioned in the figure and word in the cheque. ? The name mentioned in the cheque should be same in both side in pay-in-slip and it should be the same with the name mentioned in the cheque. ? The cheque must be crossed. 4. 4 CREDIT DEPERTMENT [pic] Consumer Credit is a part of Credit Department which involves in generating loan to the client. Bank Asia Station Road Branch provides four categories of loans those are as follows: 1. Consumer Durable Loan. 2. Auto Loan. 3. House Finance. 4. Unsecured Personal Loans. 4. 4. 1 HOUSE FINANCE [pic] Regulations for House Finance Loan: ? House Finance Loan is provided for the long period of time (Maximum 15 years including 1 year grace period). ? Loan to price ratio: The loan to price ratio is 80%. It means bank finance 80% amount of required amount. Bank provide loan for the construction which is already completed up to ground floor. ? Rate of interest of house finance loan of Bank Asia is 16%. ? Loan size: Loan Size is Tk. 3, 00,000. 0 to Tk. 50, 00,000. 00. ? Maximum Exposure (Bank Equity) 20%. ? Age of the applicant must be between 25-65 Years. ? DBR: DBR (Debt Ratio) have to 40%. ? Processing Fee: 0. 5% or 5000/- whichever is higher. 4. 4. 2 CLOSING OF AN ACCOUNT [pic] Regulation for Auto Loan: ? Auto Loan is provided for purchasing new vehicle. ? Loan to price ratio: If it is recondition car bank will finance 80% of the total price and if it is new vehicle bank will finance 90% of the total price. ? Rate of interest of Auto Loan is 16%. ? Loan size: Loan Size is maximum Tk. 20, 00, 000. 00. ? Maximum Exposure (Bank Equity) 20%. ? DBR: DBR (Debt Ratio) have to 40%. Tenor: Auto Loan provided for 60 months (for recondition vehicle), and for 72 months (new vehicle). ? Processing Fee: 1% or 5000/- whichever is higher. ? Age of the applicant must be between 25-65 Years. An application is provided to BRTA as if the vehicle is registered at the name of Bank Asia & the applicant. 4. 4. 3 CONSUME DUALE LONE [pic] Consumer Durable Loan provided to business man as financial assistant. There are some rules and regulations for consumer durable loan those are as follows: ? Loan size: Loan Size is Tk. 50, 000. 00 to Tk. 5, 00,000. 00. ? Rate of interest of Consumer Durable Loan is 17%. Maximum Exposure (Bank Equity) 40%. ? DBR: DBR (Debt Ratio) have to 33%. ? Tenor: Auto Loan provided for minimum 6 months or maximum 48 months. ? Processing Fee: 1% or 1000/- whichever is higher. ? Age of the applicant must be between 25-57 Years. ? Loan to price ratio 70%. 4. 4. 4 UNSECURED PERSONAL LONE [pic] Unsecured Personal Loans for service holders, business man will not apply for this type of loan. There are some rules and regulations for Unsecured Personal Loans those are as follows: ? Loan size: Loan Size is Tk. 25, 000. 00 to Tk. 5, 00,000. 00. ? Rate of interest of Consumer Durable Loan is 17%. Maximum Exposure (Bank Equity) 20%. ? DBR: DBR (Debt Ratio) have to 33%. ? Tenor: Auto Loan provided for minimum 12 months or maximum 48 months. ? Processing Fee: 1% or 1000/- whichever is higher. ? Age of the applicant must be between 25-57 Years. ? Loan to price ratio: Not applicable. 4. 4. 5 NECESSARY DOCUMENTS FOR A LOAN PROSESSING [pic] ? Latest license copy provided by the city corporation (Trade License). ? TIN Certificate. ? Nationality certificate/ Passport. ? Income statement (Last 6 months). ? Statement of purpose of loan. ? Reference. ? Guarantor’s information and his/her photograph. Utility bill (telephone bill, electric bill etc). ? Necessary information of existing assets and liability. ? Bank transaction last six months. ? Sources of funds from which borrower can repay the loan. ? Received security advance cheque against loan amount which is properly signed by the borrower. ? Joint necessary stump with the loan application book. Stamp charge may receive on cash or adjust from the account of the applicant. 4. 4. 6 GENERAL POLICY GUIDELINE [pic] ? Bank Asia make loan to the reputed clients. ? Encourage lending to socially desirable, nationally important and financially variable sector. Satisfactory security and collateral is required including source of repayment both primary and secondary source. ? Bank Asia may consider terms loan with maturity up to five years. ? Bank Asia extent credit facilities to the area, which the branch located and size and ability of its stuff to supervise and monitor the same also considered. ? Maximum size of the loan port folio. ? The banking corporation act 1991 restricts lending to any single obligor or a group of companies up to 15% of the capital funds of bank without having approval of Bangladesh Bank. With the Bangladesh Bank the maximum limit can go up to 100% of the capital of the bank. 4. 4. 6 CIB REPORT [pic] Bangladesh Bank established Credit Information Bureau (CIB) with a view to provide information of the borrower to the schedule banks as per requirement. It is one of our credit policies that the bank wilts not sanction/ disburses any loan facility to a defaulter. Therefore to process a loan CIB report is mandatory one. So by CIB inquiry we can get the report on our clients from Bangladesh Bank. As per credit policy a Loan outstanding of Tk 50,000. 0 and above must be reported to Bangladesh bank Inputs the information of all the borrower status in CIB report whether he is defaulter or not. So the purpose of CIB is to get the borrower(s) credit information with a view to sanction a loan. This is very important because without having CIB a loan cannot be sanctioned. It is also a tool for discourage loan defaulter in our country. CIB functions can be divided into two classes: CIB Inquiry. CIB Reporting. CIB INQUIRY: The following forms are required for CIB Inquiry: 01. Letter of Undertaking (Annexure – Ka) to be obtained from the individual client. 02. Inquiry Form: CIB – 1A It covers the information of the debtors / individual borrower or company. Name ET address is mentioned here. It is to be filled up by the bank in Capital letter/ type. 03. Inquiry Form: CIB – 2A For institutional client this is necessary. It covers the information of the owners of the concerned borrowing company/firm. In case of individual client this form is not necessary. 04. Inquiry Form: CIB – 3A This form covers the information of group related business concern of the borrower and any of its owners. Special Note: The name of the borrower / owners should be mentioned in full and must not be abbreviated. CIB REPORTING: The followings forms are required to report to Bangladesh Bank at monthly or quarterly basis. In case of loan limit one crore ET above it is need to be reported monthly and the entire loan amounting Tk. 50,000/- above are required to report quarterly. Form: CIB-1This from is related to borrower information only. Proper sector code and other information should be incorporated properly. Form: CIB – 2 This form is related to the owner(s) information of the borrowing company. Owner’s code and other information should be incorporate properly. Form: CIB – 3 This form is related to group / affiliated concern(s) information of the borrower and or any of its owners. Form: CIB – 4 This form represents the credit exposure of the borrower with the reporting bank. Dotted boxes are need not required to be reported. Economic purpose code, security code, Classification status and other information should be incorporated property. Form: CIB – 5 This form is related to the guarantor(s) information of the borrower. All the form should be filled in full name with proper address, Abbreviated name are not acceptable. The impact of CIB in our country is very positive. CIB discourage loan defaulters. A loan defaulter cannot participate in any election as a candidate. It is also a way to harass the defaulter socially. At the initial stage of CIB [about 1990] total classified Loan was detected 41 %. By introducing CIB the percentage of classified loan could be minimized. So indirectly it helps our economy. It also helps the schedule bank by way of providing information as per requirement. [pic] PART D PERFORMANCE EVALUTION BANK ASIA (PATHERHAT BR. ) [pic]5: PERFORMANCE EVALUTION BANK ASIA (PATHERHAT BR. ) [pic] 5. 1 DEPOSIT [pic] Bank Asia, Patherhat Branch launched it operation on 13th April,2012. AD The deposit volume of Bank Asia Ltd, Patherhat Branch, Chittagong is continuously increasing. The deposit amount is 19 crore at |April,2012. Through the following table the deposit position of Bank Asia Ltd Branch is shown. Showing monthly Deposit of Bank Asia Ltd. Patherhat Branch from the month of December,2011 to April,2012. Deposit (Amount in Crore) |Month |December |January |February |March |April | |Deposit |167446961 |174431349 |178152397 |173798455 |190064299 | 5. 2 ADVANCE [pic] The credit volume of Bank Asia Ltd, Patherhat Branch is increasing day by day. Showing monthly Deposit of Bank Asia Ltd. Patherhat Branch from the month of December,2011 to April,2012. Loans and Advance |Month |December |January |February |March |April | |Loans and Advance |12442268 |9877521 |10921573 |15813095 |19803015 | 5. 3 TOTAL INCOME [pic] The total income of Bank Asia is increasing day by day. Net loss of the branch is decreasing day by day by its acclerated efforts to go the horizon of Profit. Month |December |January |February |March |April | |Total Inocme |1585091 |1760171 |1595499 |1777016 |1957001 | 5. 4 TOTAL EXPANSE [pic] With expansion of opeation of the branch, the total expense of the branch is incrasing day by day. |Month |December |January |February |March |April | |Total expense |3236019 |2337849 |9169238 |2372934 |2407706 | Position for the month of March, 2012:- |Particulars |Monthly Position of February 2012 |Monthly Position of March 2012 |Cumulative up to March, | | | | |2012 | |Total Deposit |178,152,397. 55 |173,798,455. 59 |173,798,455. 59 | |Total Advances |10,921,573. 95 |15,813,095. 60 |15,813,095. 60 | |Interest Income |1,571,766. 70 |1,745,422. 9 |5,052,804. 32 | |Other Income |23,732. 57 |31,593. 58 |79,882. 32 | |Total Income |1,595,499. 27 |1,777,016. 70 |5,132,686. 35 | |Interest Expenses |1,393,856. 72 |1,488,478. 72 |4,387,861. 15 | |Other Expenses |775,381. 63 |884,456. 00 |2,492,141. 53 | |Total Expenses |2,169,238. 35 |2,372,934. 4 |6,880,002. 68 | |Net Provisional Profit/Loss |(573,739. 080 |(595,918. 77) |(1,747,316. 33) | |Foreign Inward Remittance |2,415,193. 08 |1,984,934. 01 |6,289,562. 22 | of Bank Asia, Patherhat Branch is given below– [pic] PART E JOB PART [pic]6: JOB PART [pic] 6. 1 JOB DESCRIPTION [pic] In order to achieve best service quality Bank Asia has separate department called “CUSTOMEN SERVICE DEPARTMENT”, which is responsible of maintaining over all services of the bank to satisfy customers. To establish world class guest experience in all its operations it mainly focusing on people, infrastructure, technology, products and process. In order to ensure such experience Bank Asia always looks for enthusiastic people as employee and interns as well. I was doing the Internship under customer service depertment from January 25March, 2010 to May 25, 2012 in Patherhat branch. 6. 2 KEY RESPONSIBILITIES [pic] ? Ensuring first hand services to the client. ? Keep observing the service activities during the service hour. ? Guiding lost clients to have proper services. ? Having clients suggestion and complains and reporting to BM. Ensuring clients solutions and quality services. ENSURING FIRST HAND SERVICES TO THE GUEST: [pic] Bank is a financial institution so it is very tuff for a guest to know each service point. They sometimes come up with such problems for which they need not to talk to customer service manager or Branch manager. Like – how to write a deposit slip or how to use ATM card in booth etc. in that situation my primary duty was to greet them so that they rely upon me to have on the spot service. On the other hand my primary duties are understanding guest’s problem and guide him or her to talk with the right person on the right desk. KEEP OBSERVING THE SERVICE ACTIVITIES DURING THE SERVICE HOURS: [pic] During the service hour, many unusual situations may arise. So my another duty was to keep looking into those situations and make instant solutions like keep looking whether staff behaving the way they should behave or not. To look after whether any staff is ignoring any customers or not, was my another job duty. GUIDING LOST GUESTS TO HAVE PROPER SERVICES: [pic] It is usual situation that different professions people come to bank every day. Some profession people come to bank for the first time and doesn’t know verall service arrangement of the bank. They enter into the branch and starts wondering around within the bank. They get completely lost. So, my responsibility was to listen and guide them in a proper way. HAVING CUSTOMER SUGGESTION AND COMPLAINTS [pic] Since each branch is a touch point for the bank so it’s the better option for SQ department to have better guest experience. Another duty is to collect such suggestions and complain from guests and reporting to the Branch Manager. ENSURING CUSTOMER SOLUTION AND QUALITY SERVICES [pic] A guest should have a complete solution of a problem from branch. If it is not possible for customer service officer then take him/her to customer service manager even if it is not possible for the CSM then take him/her to BM. In the meanwhile I have to ensure the quality service to the guest. 6. 3 DIFFERENT ASPECTS OF JOB [pic] There are five essential areas to excellence in guest experience. Bank Asia Client experience standard will apply it the five aspects for excellence in guest experience listed below— 1) People 2) Premises 3) Papers 4) Processes and 5) Practices ?? People: The team who serves the clients. ?? Premises: The location or place where we serve the clients. ?? Papers: The documents we use to provide and receive information and to communicate with our clients and colleagues. ?? Process: the process that enable us to delight our clients. ?? Practices: the way we interact and talk with our clients. For keep concentrating on service issues, Bank Asia has prepared client experience fundamentals for its entire team member. Bank Asia’s client standards are— o BOLD: All team members are will be bold and on behalf of their clients and colleagues. They will be first to greet, first to listen and first to make any suggestions. They are the persons who satisfy the demands of the clients even if they are unexpressed o RELIABLE: The team member will take full ownership in serving their clients to their complete satisfaction o APPEALING: The team members have to ensure that all clients touch points are appealing and inviting o CONSISTENT: The team members will ensure that their clients experience quality is consistent in all aspects across all clients service point all the time. Apart from the above mentioned jobs, I was appointed for following works as well. Software called Stelar where I have to do: ?? CIF (Customer Information Form). ?? A/C verify & close ?? FDR, DPS opening ?? Cheque book, ATM card issue, Active. My major job purpose & principle accountabilities in the banks are as follows: ?? Ensure account opening, modification, closing, and ATM card & Cheque book requisition and remittance activities. ?? Implement client service strategies to achieve Bank Asia objective and plans ?? Ensure quick resoling of client quires and issues ?? Efficiently handle customer complains ?? Properly maintain FDR, ATM, Account and other registers ?? Receiving checks, issue cheque book, Fund transfer ?? Verifying check book register, Customer Signature verification ?? Writing pay order, Statement inquire ?? Checking balance as per individual customer request ?? Providing all kinds of general banking information to the customers ?? Issuing check books and posting them into the system. 7: RECOMMENDATION [pic] ? Since the branch is situated in a suitable place, so it should introduce ATM Booth of its own very soon. ? Clearing Department should be under online. ? Locker should be introduced. ? To reduce the working presure of the existing employees new capable employees should be employed. Since there are huge number of coverage loan, a recovery team should be introduced. ? Banks marketing policy should be more stronger to influence big corporate clients joint with them. ? Bank Asia can introduce about their product and service through different TV channels. So that every initiative of the bank can go at the door the customers. ? More training facilities should be introduced for the junior officers. 8: CONCLUSION [pic] Bank Asia Limited is one of the most renowed growing bank in the country. It is true that Bank Asia increase its growth and popularity with in very short period of time. It has ensured because they have efficient, capable, professional, talent work force. All the officers are very much comitted, helpful and cooperative so that necessary information accumulate through this report. I wish total success of Bank Asia Limited, Pather Hat Branch, and special thanks to Mr. Niaz Ahammed Rashed (FAVP & Manager), SantoshKumar Bhowmik (EO & Sub Manager), and all officers &employees of Patherhat Brahnch, Chittagong. 9: GLOSSARY [pic] IBC:- Inward bills for collection. OBC:- Out ward bills for collection. CIB:- Credit Information. IRC:- Import Registration Certificate. ERC:- Export Registration Certificate. TIN:- Tax Identification Number. BIN:- Business Identification Number. L/C:- Letter of Credit. FDR:- Fixed Deposit Regular. SME:- Small and Medium Enterprise. CCI&E:- Chief Controller of Import and Export. LCA:- Letter of Credit Authorization. B/L:- Bill of Lading. B/E:- Bill of Exchange. STD:- Short Term Deposit A/C. SOD:- Secured Over Draft. LBC:- Local Bills for Collection. LTR:- Loan Against Trust Receipt. FOB:- Freight On Boat. DBR:- Debt Burdeb Ratio. CPV:- Contract Point Verification. SWIFT:- Society for Worldwide Inter-bank Financial Telecommunication. ICC:- International Chember of Commerce. 10: BIBLIOGRAPHY [pic] • Bank Asia Limited. Management Trainee Report. • Bank Fund Management, Dr. A. R. Khan. • Jeff Madura. International Financial Management. (West Publishing company, 4th edition, 1995). • Rose, P. S. (1999). Measuring and Evaluating Bank Performance. Commercial Bank Management, Fourth Edition. • Annual Report of Bank Asia Ltd. • www. bankasia. com TITLE OF INTERNSHIP: GENERAL BANKING PRACTICE OF BANK ASIA LIMITED Objective of the Study: The major objective of the study is to evaluate the general banking practice of Bank Asia Ltd. To achieve these major objectives, the specific objectives of the study are mentioned below: 1. To high light the authorities involved in general banking of Bank Asia Ltd. 2. To examine the Account opening system of Bank Asia Ltd. 3. To show the Product or Services of Bank Asia Ltd. 4. To evaluate the General Banking Function of Bank Asia Ltd. 5. To find out problems of general banking practice of Bank Asia Ltd. 6. To give suggestions for improving of general banking practice of Bank Asia Ltd. ———————– BANK ASIA | | |CHAIRMAN | |PRESIDENT AND MANAGING DIRECTOR | |DEPUTY MANAGING DIRECTOR (DMD) | |SENIOR EXECUTIVE VICE PRESIDENT (SEVP) | |EXECUTIVE VICE PRESIDENT (EVP) | |SENIOR VICE PRESIDENT (SVP) | |VICE PRESIDENT (VP) | |FIRST VISE PRESIDENT (FVP) | |ASSISTANT VICE PRESIDENT (AVP) | |FIRST ASSISTANT VICE PRESIDENT (FAVP) | |SENIOR EXECUTIVE OFFICER (SEO) | |EXECUTIVE OFFICER (EO) | |SENIOR OFFICER (SO) | |MANAGEMENT TRAINEE OFFICER (MTO) | |OFFICER | |JUNIOR OFFICER (JO) | |ASSISTANT OFFICER (AO) | |BANKING OFFICER (BO) | |TRAINEE OFFICER (TO)/TELLER | | [pic] [pic] [pic] [pic] [pic] Delivering a high-quality product at a reasonable price is not enough anymore. That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe. You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.Read more Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.Read more Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.Read more Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.Read more By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.Read more

Under Prime Minister Shinzo Abe, Japan has taken a much more significant interest in African affairs. This has primarily focused on economic development, but also geopolitics, at times with a commitment to work with India to counterbalance China’s Belt and Road Initiative. The seventh Tokyo International Conference on African Development (TICAD), held in August 2019, provided a window into Japan’s policies in Africa. The event was designed in part to help Japanese companies (and their government) to position themselves in Africa, where rival China’s influence is well established. The Japanese welcomed some of Africa’s most prominent leaders, including South African president Cyril Ramaphosa and Rwandan president Paul Kagame. Japan pledged to some US$30 billion in public and private investment over three years at the 2016 edition of TICAD. Yet, this has often been spent prudently—such as a US$94 million doled out to renovate a Kenyan geothermal plant. The 2019 event ended with Japan promising some US$20 billion in private sector investment over three years. “If partner countries are deeply in debt, it interferes with everyone’s effort to enter the market,” said Abe at the event. Elsewhere, his comments on sustainability of engagement in Africa offered veiled swipes at China’s role in Africa. Despite being the fourth-largest spender on development aid in Africa, Japanese trade with the African Union has been much slower to develop. Indeed, Japan’s trade with Africa in 2017 was worth US$17 billion, less than half of what it was in 2008. Meanwhile, China conducted some US$204 billion in trade with Africa in 2018 alone. However, other metrics tell a different tale there were some 800 Japanese competes in Africa in 2018 as compared to just 250 in 2010. One possible reason Japan is treading cautiously in Africa is that it likes to avoid moving unilaterally and may be seeking to work more closely with partners in Africa. Of potential partners for engagement with Africa for Japan, the most important may be that other large Asian democracy which is concerned about the rise of China – India. Japan and India were the two main drivers behind the launch in 2017 of the Asia-Africa Growth Corridor (AAGC), which is often touted as an alternative to Beijing’s Belt and Road Initiative. Bangladesh, Iran, Kenya, Madagascar, the Maldives, Mauritius, Mongolia, Myanmar, Seychelles, Singapore, Sri Lanka, Tanzania, Thailand, Zambia, and Zimbabwe all became members of the project. Yet, three years later, little has come of the effort, and a frustrated Japan may refocus on its vision of a “Free and Open Indo-Pacific”, a vision announced in Kenya by Prime Minister Abe in 2016 at the TICAD VI summit. Japan’s plan to help Madagascar build a port at the outer edge of the Indo-Pacific region suggests how seriously Japan is committed to the plan. Japan envisions several economic corridors: a West African Growth ring to connect the Ivory Coast, Togo, Burkina Faso, and Ghana; an East African route to connect Kenya’s Mombasa with Uganda (which is likely in keeping with IGAD’s infrastructure corridor plans); and the Nacala Corridor which will run through the Southern African countries of Malawi, Zambia, and Mozambique (in order to export coal to Japan). On the security front, Japan is well ahead of potential partner India in developing ties with the continent. India held its first defense exercise with seventeen African nations last year. Japan, conversely, has built its first overseas military base since World War II in Djibouti, and spent funds to help stabilize northern Nigeria. These commitments have not come without risks. In 2017, Japan was forced to withdraw its 350-man peacekeeping contingent based in Juba, South Sudan, after its deployment caused controversy in Japan due to the ongoing South Sudanese Civil War. That same year, a Chinese official newspaper reported that a Japanese naval ship had sent scuba divers to approach a Chinese warship while both ships were docked in a Djibouti harbor. “Japan bears the responsibility of fostering the confluence of the Pacific and Indian Oceans and of Asia and Africa into a place that values freedom, the rule of law, and the market economy, free from force or coercion, and making it prosperous,” said Prime Minister Abe at the opening session of TICAD VI.

As of now, the agriculture ministry has asked states to plan for the diversification of crops, ensure adequate input supplies as well as better adoption of drought-tolerant crop varieties and firm up strategies to augment fodder output, among other measures. In case of a bad drought, the government may plan to offer financial assistance including subsidy for irrigation and bonus for procurement of paddy, apart from supplying more inputs to states, as it did in 2009. It was in 2009 India last faced a drought incidentally, the worst in 37 years and the villain was El Nio, which is predicted to recur this year. In 2009, the countrys grain production hit 218 million tonnes, 6% lower than in 2008 but still around the levels achieved three years earlier. However, inflation in grains and fruits and vegetables hit 14.49% and 9.56%, respectively, in the 2009-10 fiscal, mainly owing to the drought. The India Meteorological Department (IMD) on Thursday forecast below-normal monsoon showers for 2014, at 95% of the benchmark long-period average (LPA), citing the impact of an emergent El Nio weather system. The government is getting battle-ready for even a severe drought given that the IMDs April forecasts have often been wrong. In 2009, the last El Nio, the met had initially forecast 96% rain against the actual 23% shortfall. According to the sources, the Hyderabad-based Central Research Institute for Dryland Agriculture (Crida), which is firming up the plan along with the Union agriculture ministry and state universities, has divided the country into five zones for the detailed planning covering 500 districts. The plans for each district will contain basic agricultural statistics, physical characteristics of the district (soil mapping) and details of the crops and methods of cultivation to be adopted in case of exigencies, including a monsoon failure. The government will complete the plans for 100 more districts, which are relatively less vulnerable to a drought, during the next one year, an agriculture ministry official said. The focus of the contingency plan is to prepare farmers in various districts against delayed monsoon, excessive rains and uneven rainfall so that they can grow appropriate varieties and save their crops, said B Venkateswarlu, who is anchoring the project at Crida. States would be asked to ensure effective nutrient management (for example, foliar spray of KC1 or KNO3 to partially reduce stress during drought) as well as large-scale demonstrations of climate-resilient agronomic practices, including direct seeding options for short-duration paddy varieties, roughly in step with the strategies followed in 2009. No need to panic, but be on the alert. Every El Nio does not turn out to be a drought for India. Keep the import policy for edible oilseeds and oils open, and so also that of pulses, cotton and vegetables, said Ashok Gulati, chair professor (agriculture) at the Indian Council for Research on International Economic Relations. El Nio is a warming of sea-surface temperature levels in the central and east Pacific and cooling of the west that occurs every four to 12 years. While tackling a drought is the primary responsibility of a state, the Centre provides all possible assistance, once sought. Upon the declaration of drought by a state, a central team visits the affected regions and, based on its recommendations, the Centre decides on extending financial assistance to the state. At stake is farm sector growth apart from the livelihoods of millions of farmers, as roughly 60% of the net-sown area is rain-fed, accounting for 40% of food production. It impacts the lives of at least 40% of human and 60% of livestock population in the country, according to a farm ministry assessment. As much as 87.5% of coarse cereals as well as pulses, 77% of oilseeds, 65.7% of cotton and 48% of rice in the country are predominantly grown in the rain-fed areas. "Although the IMD's forecasts in recent years have been more accurate than many global agencies, they are far from the exact mark. But such is the nature of monsoon predictions. So the government will ask the states to prepare for even the worst possible scenario," said a senior government official. "If the geographical spread of the rains is good, we have less reasons to worry," he added. This leaves an enormous task for the government at the centre, as it will have address not just an industrial slowdown and other economic woes, but also a possible drought and resultant drop in farm production. However, the government officials said the country is a better position to deal with a drought now than in 2009. Granaries were brimming with 48 million tonnes of grain stocks as of April 1, more than double the buffer requirements. Supplies of sugar, which had to be imported in large quantities at zero duty after the 2009 drought, remain plentiful due to a fourth straight year of rising production through 2013-14. However, pulses and edible oils face the maximum risk of a price rise in case of a likely drop in domestic production, as the country imports nearly one-fifth of its pulses and more than 50% of edible oils requirement annually. Vegetable oil stocks, at ports and in the pipelines, hit 12 million tonnes as of April 1, slightly lower than a year before. While there is no cause for panic as the government has prepared district-specific contingency plans, it should ensure sufficient availability of seeds, particularly of short-duration crop varieties in case of below-normal monsoon, said Ramesh Chand, director at the state-run National Centre for Agricultural Economics and Policy Research.

Business & Policy Food Issues Maple Syrup: A Sweet Solution for Farmers? By Katherine Martinko Senior Writer University of Toronto Katherine Martinko is a writer and expert in sustainable living. She holds a degree in English Literature and History from the University of Toronto. our editorial process Twitter Twitter Katherine Martinko Updated April 23, 2019 Public Domain. Wikimedia Share Twitter Pinterest Email Business & Policy Corporate Responsibility Environmental Policy Economics Food Issues Managing a sugar bush is a win-win situation for all involved. An unexpected crop could become the future of farming in the northeastern United States. Maple syrup, that sweet favorite of lazy weekend breakfasts, is now seen as a potential agricultural savior for a number of reasons. Lela Nargi writes for Civil Eats, "The burgeoning maple industry — valued at $140 million in 2017 — can also support the protection of intact, healthy forests, and a forest that lives to grow another day can provide increasingly critical carbon and other ecological benefits to our warming and de-diversifying earth." When a forest can be turned into a productive sugar bush, there's a financial return for farmers, which discourages logging the land or selling it to developers. Money comes from the sale of syrup, as well as selling carbon credits in the offset market; should a farmer choose to do this, it can bring in as much as $100 per acre of bush. Maintaining forest cover is more important than ever, as New England has been badly deforested over the past century and continues to lose around 65 acres every day. Nargi reports, "The region is on track to lose an additional 1.2 million acres by 2060. Vermont, which produces 47 percent of U.S. maple syrup, is losing 1,500 acres of forest a year. New York, [which] produces 20 percent of the country’s syrup... has also seen a 1.4 percent decline from 2012 to 2017." As farmers get out of other agricultural industries, such as wheat and dairy because the markets are too volatile and competitive, they must seek out alternatives. Maple fits well with growing interest in local, seasonal products and natural sweeteners, and sales have been booming in recent years. Technological advances have taken sap collection far beyond the days of lugging metal buckets by hand. Now, vacuum pumps and miles of plastic tubing snake through sugar bushes, delivering the sap directly from trees to collection bins, which are then taken to an industrial-scale evaporator. Apparently these have been able to transcend the negative impacts of climate change thus far. In the words of Arnold Coombs, of Coombs Family Farms, "New techniques have helped us have good crops even with poor weather that would have been disastrous 30 years ago." It's unknown how technology will be able to offset shrinking amounts of snow, however. I wrote about this in December, how an inadequate snow pack causes sugar maples to grow 40 percent slower than during a normally cold year, and makes them unable to recover. (Snow insulates trees, protecting them from frost damage.) This in turn affects sap production, so Coombs' optimism may be put to the test. At least there are fairly stringent environmental standards for maple farmers, and a well-managed forest tends to be a healthier, more resilient one. Organic certification and Audubon Vermont overlap in some areas pertaining to bird habitat, mandating that there must be 25 percent diversity in tree types to allow for a variety of species. The standards cover many aspects of forest stewardship: "[Organic standards] also establish how and how much to thin trees, what kind of equipment is too damaging to roll around them, and how to maintain woodland roads and paths. These provide 'ecological sustainability' in ensuring little to no damage to the surrounding environment." While the expansion of the maple industry appears mostly positive, there is some concern over how industrialization – and the rise of 'Big Maple' – would affect it. The main worry cited in Civil Eats is how plastic tubing covering large distances would affect wildlife moving through the forest. Five years ago, The Nature Conservancy concluded that "wildlife habitat and financial values lined up more favorably with sugarbush than timber," so it stands to reason that wildlife would fare better with tubing for several weeks each year than not having a forest to inhabit. It will be interesting to see what happens over the next few years. I suspect that climate change will have a much greater impact on farming of all kinds within a short time period, but investing in agricultural crops that leave forests intact is likely a wise move.

- On which company IND as is applicable? - Why do companies use IFRS? - What is IFRS in India? - What is adoption of IFRS? - Why is LIFO illegal? - Who is required to follow IFRS? - What is the difference between Ind AS and IFRS? - How many countries use IFRS? - Is LIFO still allowed? - What companies use LIFO method? - Does India follow GAAP or IFRS? - Is GAAP used in India? - What are the 4 principles of GAAP? - What are the 5 basic accounting principles? - How many IFRS are there? - Can private companies use IFRS? - Is ias part of IFRS? - How many are ind in India? - Where is IFRS applicable? - When did India adopt IFRS? - Is LIFO allowed in India? On which company IND as is applicable? If IND AS become applicable to any company, then IND AS shall automatically be made applicable to all the subsidiaries, holding companies, associated companies, and joint ventures of that company, irrespective of individual qualification of such companies.. Why do companies use IFRS? IFRS Standards strengthen accountability by reducing the information gap between the providers of capital and the people to whom they have entrusted their money. … For businesses, the use of a single, trusted accounting language lowers the cost of capital and reduces international reporting costs. What is IFRS in India? IFRS Standards are required for domestic public companies. Indian Accounting Standards (Ind AS) are based on and substantially converged with IFRS Standards as issued by the Board. India has not adopted IFRS Standards for reporting by domestic companies and has not yet formally committed to adopting IFRS Standards. What is adoption of IFRS? By adopting IFRS, a business can present its financial statements on the same basis as its foreign competitors, making comparisons easier. Furthermore, companies with subsidiaries in countries that require or permit IFRS may be able to use one accounting language company-wide. Why is LIFO illegal? IFRS prohibits LIFO due to potential distortions it may have on a company’s profitability and financial statements. For example, LIFO can understate a company’s earnings for the purposes of keeping taxable income low. Who is required to follow IFRS? IFRS Standards are required for use by all or most domestic publicly accountable entities. IFRS Standards are permitted, but not required, for use by at least some domestic publicly accountable entities, including listed companies and financial institutions. What is the difference between Ind AS and IFRS? IFRS requires a company to present ex- penses recognized in the profit and loss account using a classification based on either their nature or their function within the company. Ind AS requires such classification by nature. How many countries use IFRS? 120 countriesFactually, about 120 countries presently use IFRS across the globe. Is LIFO still allowed? Key Takeaways from Last-in First-Out (LIFO) It provides high-quality income statement matching. LIFO is prohibited under IFRS and ASPE. However, under the US Generally Accepted Accounting Principles (GAAP), it is permitted. What companies use LIFO method? They have to be consistent. By peeking into a 10-Q or 10-K, you can quickly discover which firms use LIFO and which use FIFO. Just to name a few examples, Dell Computer (NASDAQ:DELL) uses FIFO. General Electric (NYSE:GE) uses LIFO for its U.S. inventory and FIFO for international. Does India follow GAAP or IFRS? IFRS is used in 110 countries, and it’s one of the most popular accounting standards. On the other hand, Indian GAAP is a set of accounting standards that are specifically designed for the Indian context. … Most Indian companies follow Indian GAAP while preparing their accounting records. Is GAAP used in India? Indian companies have begun to adopt various international standards, especially US GAAP, UK GAAP and IAS (‘international GAAP’), in addition to presenting accounts under Indian GAAP. … Financial statements are filed with the registrar of companies and the Securities and Exchange Board of India. What are the 4 principles of GAAP? Understanding GAAP1.) Principle of Regularity.2.) Principle of Consistency.3.) Principle of Sincerity.4.) Principle of Permanence of Methods.5.) Principle of Non-Compensation.6.) Principle of Prudence.7.) Principle of Continuity.8.) Principle of Periodicity.More items…• What are the 5 basic accounting principles? What are the 5 basic principles of accounting?Revenue Recognition Principle. When you are recording information about your business, you need to consider the revenue recognition principle. … Cost Principle. … Matching Principle. … Full Disclosure Principle. … Objectivity Principle. How many IFRS are there? 16 IFRS[Updated] List of IFRS and IAS 2019 | WIKIACCOUNTING. The following is the list of IFRS and IAS that issued by International Accounting Standard Board (IASB) in 2019. In 2019, there are 16 IFRS and 29 IAS. IAS will be replace IFRS once it is finalize and issue by IASB. Can private companies use IFRS? No. A private enterprise can choose to adopt either International Financial Reporting Standards (IFRS or Part I of the Handbook) or ASPE (Part II of the Handbook). In either case, the private enterprise may then state that its financial statements have been prepared in accordance with Canadian GAAP. Is ias part of IFRS? International Accounting Standard (IAS) and International Financial Reporting Standard (IFRS) are the same. The difference between them is that IAS represents old accounting standard, such as IAS 17 Leases . While, IFRS represents new accounting standard, such as IFRS 16 Leases. How many are ind in India? 39 IndianPresently, the Institute of Chartered Accountants of India (ICAI) has issued 39 Indian Accounting Standards (Ind AS) which have been notified under the Companies (Indian Accounting Standards) Rules, 2015 (‘Ind AS Rules’), of the Companies Act, 2013. Where is IFRS applicable? All banks including unlisted. IFRSs permitted in both consolidated and separate company statements. IFRSs permitted in consolidated financial statements except for very small companies. IFRSs permitted in separate company statements except for very small, insurance companies, and some regulated companies. When did India adopt IFRS? 1 April, 2011The Institute of Chartered Accountants of India (ICAI) has announced its decision to adopt IFRS in India with effect from 1 April, 2011. The standards will have a significant impact on capital markets but students and investors know remarkably little about these standards. Is LIFO allowed in India? The cost of other inventory items used is assigned by using either the first-in, first-out (FIFO) or weighted average cost formula. Last-in, first-out (LIFO) is not permitted. … Indian companies have generally adopted the weighted average or FIFO method.

Often, the negative deposit clause is supplemented by agreements that limit the borrower`s ability to take on less secured debts. Negative commitment is important because it protects the interests of unsecured lenders, who may be negatively affected by a company`s borrowing. The floating tax had a negative effect on the protection afforded to the creditor in the agreement. In particular, in the event of insolvency, the creditor may lose the right of priority over the debtor`s assets. As a general rule, negative collateral allows the borrower to borrow future secured debt as long as the transaction is an authorized exception or the beneficiary of the existing negative collateral is insured equally at the time of the new secured debt crisis. For example, if a company obtains a $5 million loan from a bank and pledges all of its assets worth US$5 million as collateral for the loan, the bank may include a negative pledge clause in the contract. This means that if the same company requests another $2 million loan from another bank, if the second bank insists that the company promise its assets worth $2 million as collateral, the negative promise it made with the first bank prohibits it from entering into the second credit contract. Negative collateral is a clause used in some credit contracts prohibiting a borrower from using the same guarantees with multiple lenders.3 min read Negative deposit clauses are almost universal in modern unsecured commercial credit documents. The objective is to ensure that a borrower who has taken out an unsecured loan can no longer borrow from another lender at a later date to secure the subsequent credit on the declared assets. If the borrower could do so, the original lender would be at a disadvantage, as the subsequent lender would first use the assets in the event of default. In this case, the clause prevents the borrower from using its own assets to secure other sources of financing. If the borrower insures other loans, the initial loan of the first institution will be less secure, given that the borrower now has a larger amount of debt obligations and the original institution may not have priority status for repayment. Negative collateral is a provision of the contract that prohibits the debtor, in a contract, from creating security interests on certain assets. The contractual provision is intended to protect unsecured creditors by ensuring that debtors can only use unsured assets as collateral. Because a negative deposit clause enhances the security of a bond issue, it often allows issuers to borrow funds at a slightly lower rate. This lower interest rate benefits the issuer, creating a win-win situation for both issuers and the bondholder. Over time, negative promise becomes a building block for transaction financing. It does not give an interest in security since it does not grant the creditor shares of the debtor`s property. Mortgages sometimes contain negative deposit clauses. Sometimes the borrower may break the negative instructions. In such a scenario, the lender has a number of options: the negatively mortgaged clause ensures that the borrower`s assets remain unloaded and are available to meet the requirements of unsecured creditors in the event of insolvency. Insolvency is a state of financial emergency, while bankruptcy is a legal procedure. A negative deposit clause also limits the likelihood that a particular asset will be mortgaged more than once, which prevents conflicts in which the lender is entitled to the asset when the borrower is late in payment. Consider a scenario in which a company lends $1 million to a bank, and the bank requires that all $500,000 of the company`s assets be used as collateral for the loan. The Bank wants to protect its interests; Therefore, there will be a negative deposit clause.

What is a Commercial Bank? A commercial bank is a financial institution that grants loans, accepts deposits, and offers basic financial products such as savings accounts and certificates of deposit to individuals and businesses. It makes money primarily by providing different types of loans to customers and charging interest. The bank’s funds come from money deposited by the bank customers in saving accounts, checking accounts, money market accounts, and certificates of deposit (CDs). The depositors earn interest on their deposits with the bank. However, the interest paid to depositors is less than the interest rate charged to borrowers. Some of the loans offered by a commercial bank include motor vehicle loans, mortgages, business loans, and personal loans. Functions of Commercial Banks The basic role of a commercial bank is to provide financial services to the general public, businesses, and companies. Banks also ensure economic stability and sustainable growth of a country’s economy. A commercial bank performs the following functions: 1. Accepting Deposits Accepting deposits is one of the oldest functions of a commercial bank. When banks started, they charged a commission for keeping money on behalf of the public. With the changes in the banking industry over the years and the profitability of the business, banks now pay a small amount of interest to the depositors who keep money with them. However, depositors also incur administrative fees to maintain their accounts. Banks accept three types of deposits. The first one is the savings deposit for small savers who are paid interest on their accounts. They can withdraw their money up to a limited amount by writing a cheque. The second type of deposit is the current account for people in business who can withdraw their money at any time without notice. Banks do not typically pay interest on deposits held in current accounts. Instead, the account holders are charged a nominal fee for the services rendered. The last type of deposit is the term or fixed deposit. Customers who have money that they do not need for the next six months or more can save in the fixed account. The rate of interest paid increases with the length of the fixed deposit. Customers can only withdraw the money at the end of the agreed period by writing to the bank. 2. Advancing Credit Facilities Advancing loans is an essential function of banks since it accounts for the highest percentage of revenue earned annually. Banks mostly offer short-term and medium-term loans from a percentage of the cash deposits at a high interest rate. They do not provide long-term financing due to the need to maintain liquidity of assets. Before advancing loans to customers, banks consider the borrower’s financial status, business profitability, nature and size of the business, and ability to repay the loan without default. 3. Credit Creation While granting loans to customers, banks do not provide the loan in cash to the borrower. Instead, the bank creates a deposit account from which the borrower can draw funds. This allows the borrower to withdraw money by cheque according to his needs. By creating a demand deposit in the borrower’s account without printing additional money, the bank increases the amount of money in circulation. 4. Agency Functions Commercial banks serve as agents of their customers by helping them in collecting and paying cheques, dividends, interest warrants, and bills of exchange. Also, they pay insurance premiums, utility bills, rent, and other charges on behalf of their clients. Banks also trade shares, securities, and debentures, and they provide advisory services for customers that want to buy or sell these investments. In property administration, commercial banks act as trustees and executors of the estate on behalf of their customers. Banks charge a nominal fee for the agency functions performed on behalf of their clients. Apart from the above primary functions, banks also perform several other functions. They provide foreign exchange to clients who are in the import and export business, by buying and selling foreign currency. However, banks must get permission from the regulatory body, mainly the central bank, before dealing with foreign exchange. A commercial bank also acts as a custodian of precious stones and other valuables. They provide customers with lockers where they can put their jewelry, precious metals, and crucial documents. Such items are more secure when stored at the bank than keeping them at home where they may be stolen or damaged. Types of Loans Offered by Commercial Banks There are several types of loans advanced by commercial banks to their clients. These loans include: 1. Bank Loan A bank loan is an amount of money offered by a bank to a borrower at a defined interest rate for a fixed period. Before granting a bank loan to a client, a bank must obtain several important documents to verify that the borrower will pay back the loan. These documents may include copies of identity, proof of income, and audited financial statements in the case of corporate clients. The loan is granted against collateral that, if the customer defaults, the bank can sell them to recover the money. The collateral may be equipment, machinery, real estate property, inventory, documents of ownership, and other items. 2. Cash Credit Cash credit is an arrangement between the bank and a client, and it allows the client to withdraw money beyond their account limit. The cash credit is advanced for a period of one year, but it may extend to even three years in special circumstances. The amount is deposited in the current account of the borrower and can be withdrawn through a cheque. The interest charged on the cash credit depends on the amount of money and the duration for which the money has been withdrawn. 3. Bank Overdraft A bank overdraft is a form of financing that allows the current account holders to overdraw their account up to a specified limit. It does not require any written formalities and clients use the overdraft to meet urgent needs. Interest is charged on the amount that the current account has been overdrawn with and not the full amount of overdraft allowed by the bank. 4. Discounted Bills of Exchange A bank discounts a bill of exchange by providing money immediately to the holder of the bill. The bank deposits the money in the holder’s current account, after deducting an interest rate for the loan period. Once the bill of exchange matures, the bank gets its payment from the banker of the bill holder. Regulation by Central Banks Commercial banks are regulated by the central banks in their respective countries. Central banks act as the supervisor of commercial banks, and they impose certain regulations to ensure banks operate within the stipulated rules. For example, central banks make it mandatory for commercial banks to maintain bank reserves with them. Some central banks set the minimum bank reserves, requiring banks to keep a particular percentage of their customer deposits at the central bank. The reserves help to cushion banks against unexpected events like bank runs and bankruptcy. CFI is the official global provider of the Commercial Banking & Credit Analyst (CBCA)™ certification, designed to transform anyone into a world-class financial analyst. If you’re interested in advancing your career in corporate finance, these CFI articles will help you on your way:

What is Horizon Analysis? Horizon analysis is a method used to estimate a portfolio’s expected total return over a given investment horizon. It uses scenario analysis to view a given bond swap as a well-defined mixture of components from idealized swap categories at each point in time. Horizon analysis enables the portfolio manager to associate the primary sources of the expected return with the portfolio. By pursuing such a route, a portfolio manager can explore the vulnerabilities of the portfolio’s expected return over a range of market conditions and eventually define and quantify different forms of risk. - Horizon analysis compares a portfolio’s projected return over different time frames using scenario analysis to arrive at a more realistic estimate of its expected returns. - It helps portfolio managers estimate market uncertainties and bond market yields. - Since it is based on the planned investment horizon, the analysis simplifies calculations to give the bond market projection. Understanding Horizon Analysis Horizon analysis comes in handy for portfolio managers to project bonds’ performance for a planned investment period. It also enables managers to determine market risks, future market yields, and reinvestment rates over the planned investment horizon. Expected returns are broken down into different scenarios to determine which bonds would bring the best gains over a planned horizon period. In part, the approach simplifies the computation of certain risk measures, such as yields spreads and break-even points for yield levels. Profit evaluation of bonds is typically untenable using yield maturity. The dramatic changes in risk structures are also clarified in the horizon analysis. Estimating Returns Level Horizon analysis is based on the passage of time, which usually impacts bond investment decisions. Basically, bond market participants hold two views – one is short-term with day-to-day price movements as the main focus, and the second is long-term with the primary focus on some measures to yield-to-maturity. However, most investors tend to explore investment horizons earlier than the earliest maturity bonds under consideration rather than those that extend beyond the current calendar year. At the same time, a workout period extending beyond the immediate months ahead – but not further than a few years into the future – gives the most comfortable projections of the bond market. Horizon analysis is a convenient analytic tool that helps the investor explore the middle ground, “between tomorrow and maturity.” Such an analysis framework indicates the level of returns within the planned investment horizon. Using Horizon Analysis to Relate Portfolio With Sources of Return Value of a Bond When an individual buys a bond, they earn income in three ways – coupon income, interest on interest, and capital gains from the sale of the bond. Coupon in this context entails coupon payments and accrued interest received in case the bond is sold in advance. Interest-on-interest is the return earned by reinvesting and compounding of the coupon income. The interest amount on the interest-on-interest brings uncertainty because the specific vehicle and the reinvestment rates are future based and hard to predict. However, interest-on-interest can account for a significant proportion of the total return for a long-term bond, implying that it should be included during bond investment evaluation. One way to overcome this uncertainty is to assume a constant reinvestment rates. Horizon analysis can be used to explore the uncertainty impact associated with reinvestment by breaking down the expected returns across some range of feasible values. The increase in the bond’s market value is represented as the capital gain component of return. Shifting the Capital Gain The three basic sources of return apply to any investment medium. Bonds produce a higher portion of income in the long term compared to other types of securities. The income results from the relatively predictable coupon and redemption flows. However, having short and intermediate-term investment maturities increases the uncertainty of the bond’s total return as they reduce the potential for capital gains. Horizon analysis helps to compare and differentiate a bond’s return over the given periods. As a result, horizon analysis leads to an important refinement in the capital gain component through this differentiation. Using Horizon Analysis to Estimate the Yield Accumulation Return Horizon analysis obtains an approximate measure of the accumulating return on bonds by adding the accumulated capital gain component to the bonds return. The capital gain component is relatively free from market uncertainties associated with the daily movement of market rates. The return, also known as the yield accumulation return, can continue to grow over longer investment horizons. In the early years, the coupon income gives approximately twice as much return as the accumulated capital gain, unlike the interest on interest, which is usually negligible. As the investment horizon gets longer, the coupon income maintains a constant growth, the interest on interest grows at an assumed rate, and the capital gain increases its contribution to the yield. Horizon analysis uses cumulative percentage return, represented as the percentage of the current investor base. Volatility is also measured in the same fashion by incorporating the idea of volatility over time into the representation of capital gain. CFI is the official provider of the global Capital Markets & Securities Analyst (CMSA)™ certification program, designed to help anyone become a world-class financial analyst. To keep advancing your career, the additional CFI resources below will be useful:

Inflation in advanced economies has been stubbornly low ever since the 2008 global financial crisis (GFC). Then, last spring, the Covid-19 pandemic hit the global economy and lockdowns caused a collapse in economic activity. This led to a sharp fall in oil demand and energy prices. The pandemic also hit consumer demand across the world. Together these factors resulted in lower global inflation in 2020. Now, these factors which dragged inflation lower in 2020 are either reversing or were temporarily leading to higher inflation in 2021. Too little inflation is a bad thing, but too much inflation is also a bad thing. Indeed, a key objective for central banks is to achieve price stability. Inflation targeting became popular as an anchor for monetary policy in the early 1990s. The UK central bank adopted inflation targeting in 1992, followed by the European Central Bank in 1999. But, it was not until 2012 that the US central bank (the Fed) adopted an explicit inflation target, even though it maintained a dual mandate to also target maximum employment. Central banks responded to the pandemic with massive policy stimulus using interest rate cuts, asset purchases and liquidity injections to support the economy. Governments also responded with significant fiscal stimulus. Further, the rapid development of effective vaccines offers hope for continued recovery to a new normal. Three main factors are putting upward pressure on inflation in 2021, higher energy prices, the expiry of some economic support measures and increased shipping costs. It is important to remember that inflation is defined as the year-on-year change in the level of prices, which means that a one-off change in prices simply falls out of inflation after 12 months. First, higher energy prices. Oil prices fell sharply last spring, dragging down on inflation throughout 2020. Oil prices have now recovered to around the same level they were before the pandemic, so will soon begin to push up on inflation as they begin to be compared to the low level of prices last year. Second, temporary Covid-19 economic support measures will boost inflation in 2021. For example, a number of European countries (including both Germany and the UK) cut VAT temporarily last year, which lowered the level of consumer prices and pulled down inflation in 2020. But, as VAT returns to normal this year, there will be a symmetric impact, pushing inflation up in 2021. Another example is, higher Medicare payments to doctors in the US, as part of the Covid-19 stimulus package, which are effectively a temporary increase in prices that will increase inflation in 2021. Third, increased shipping costs for consumer goods. Global shipping costs, as measured by the Freightos Baltic Index, which is based on the cost of shipping containers, has almost trebled since the start of last year. The pandemic induced a shift in consumption patterns as lockdown diverted expenditure from services to consumer goods. This has resulted in a surge in demand for containers and shipping services to move them from areas of production (mainly Asia) to areas of consumption (the US and Europe). These temporary factors are expected to push up inflation over the first half of this year. Indeed, all major forecasters that we follow expect higher inflation in 2021. Before the GFC, such a surge in inflation would have set alarm bells ringing. But today, central banks will welcome a period of higher inflation because it has been stubbornly low since the GFC. Indeed, we expect central banks to effectively “look through” the temporary factors pushing inflation up in 2021 and focus on maintaining as much support for the economic recovery as possible. In conclusion, inflation will pick up noticeably over the next few months and remain elevated throughout most of 2021. However, modestly higher inflation is actually a positive indicator of the ongoing recovery in the global economy. Indeed, the temporary nature of the factors pushing up inflation in 2021, combined with spare capacity in both product and labour markets, make it unlikely that inflation will increase further and become a real concern in the near future.

UN data suggests ethanol production does not increase food prices The United Nations Food and Agriculture Organization (UN FAO) has released data showing that global food prices have experienced the steepest monthly drop since 2008. According to the Global Renewable Fuels Alliance (GRFA), the decline in food prices has coincided with a period of record ethanol production expansion, reaching a high of 94 billion litres in 2014 from 83.5 billion litres in 2012, a 10% increase over this period. This contrast could indicate that increased ethanol production has not driven up food prices. The UN FAO Food Price Index averaged 155.7 points in August, down 5.2% from July, representing the steepest monthly drop since December 2008 with virtually all major food commodities registering marked dips. This drop coincides with a fall in crude oil prices in July of 19%, closing at $ 48.25 (€42.61) per barrel on 31 July. The Global Renewable Fuels Alliance (GRFA) has for several years argued that the price of oil and energy inputs are the single most influential drivers of food and commodity prices. A number of international institutions including the World Bank, International Energy Agency (IEA), and United Nations Food and Agriculture Organization (UN FAO) have also recognised the strong relationship between oil prices and food prices, GRFA says. A 2013 World Bank publication, ‘Long-Term Drivers of Food Prices’, concluded that almost two thirds of food price increases are caused by rising oil prices. The report states that between 1997-2012 the price of crude oil caused maize and wheat prices to increase by 52% and 64%, respectively. The report also found that biofuels had little impact on food prices during this period. The recent collapse of global crude oil prices has been followed by the collapse in the global food price index, demonstrating possible reliance of food prices on the price of oil. In a recent publication, the UN FAO concluded that increased biofuels demand has helped the agriculture sector by increasing agricultural productivity and output which has ‘ensured that the global supply of crops available for non-biofuel uses has continued to grow over the long term.’ In a speech this past January at the Global Forum for Food and Agriculture, the UN FAO director-general Jose Graziano da Silva recognised biofuels as a part of the global agriculture complex with social, agricultural, and environmental benefits and outlined the potential for agriculture to accommodate mutually supportive food and biofuel production. Biofuels Plantation Services International

Need help? Call us on +44 (0)20 7613 3444 or email Basics of Financial Accounting This course will introduce the learner to the important aspects of financial accounting and his/her related responsibilities at the financial institution. The course will familiarize the learner with crucial business and financial terms and their definitions and how to apply them to work at the financial institution. Upon completing this course, the learner will be able to: - Recognize and use the 5 C’s of Credit when analyzing customers. - Properly maintain various financial statements, including income statements and balance sheets. - Understand the importance and relevance of IFRS and GAAP to the financial institution T1. Accounting and its Importance: This topic demonstrates the importance of accounting and how accounting information is typically used. This topic also includes different methods of accounting. T2. Double Entry Accounting: This topic will provide the learner with a brief history of double entry accounting, the advantages of the method, and an example of how a transaction would be calculated using double entry accounting. T3. Key Financial Terms and Definitions: This topic will provide the learner with commonly used terms and organizations associated with financial accounting. T4. Financial Statement Basics: This topic will provide the learner with fundamental information regarding financial statements, including an overview of the bookkeeping process, and the journalizing and posting process. T5. The Balance Sheet: This topic will demonstrate how assets, liabilities, and equity are used in the accounting equation, and will provide an example of a balance sheet. T6. The Income Statement: This topic will provide the learner with information regarding different elements that are contained in an income statement, and provides examples of a single-step income statement and a multi-step income statement. T7. The Cash Flow Statement: This topic will familiarize the learner with sections included in a cash flow statement. This topic will also demonstrate how a cash flow statement is calculated using a hypothetical business scenario that covers three months of transactions. T8. GAAP: This topic provides the learner with a brief history of the U.S. Generally Accepted Accounting Principles (GAAP), and demonstrates why the U.S GAAP is important. This topic also ensures that the learner understands the function of the IFRS and provides a list of countries that use it. Please note that any legal and compliance references in this course will pertain to US legislation.

When looking at the energy/electricity situation of developing countries around the world it is always helpful to have in mind a reference point for a better understanding, analysis and judgement of the respective challenges in the case at hand. The country situation Germany should help to provide this critical positioning. This article first briefly discusses the present energy situation in Germany in general terms, before adressing in more detail the electricity sector and recent political endeavours that link climate protection and long-term sustainable energy supply. Primary energy consumption Primary energy denotes the state of energy before any conversion or transformation process towards a more valuable energy form has taken place (e. g. solar energy, wind energy, fossil fuels, hydro power, nuclear fuels, biomass etc.). Primary energy consumption relates to the entire amount of primary energy used by an economy in a certain time period (usually a year). In Germany, primary energy consumption in 2009 amounted to 13398 PJ (= 3720 TWh). Although there has been a sharp decline in petroleum product consumption since 1995 (-14,4%), it still remains the most important primary energy carrier representing about a third of total primary energy consumption. Similarily, coal consumption has been decreasing during the last 10-15 years, but remains an important primary energy carrier. A substitution process in the direction of an increasing gas consumption has accompanied the decrease in consumption of the beforementioned energy sources. Germany is a net importer of primary energy with an increase of imports from 57% in 1990 to 70% in 2008. This situation underlines the high degree of energy dependence the German state faces. The rising import quotas can largely be attributed to a rising demand of gas and substitution processes of German coal through coal from international markets. The following diagram offers an overview of the share of different energy carriers in primary energy consumption: The following energy flow diagram offers insight into the shares of different sectors in total primary energy consumption in 2009. Very prominently, it visualizes the high degree of dependence on energy imports (~70%). Furthermore, it shows that approximately 25% of primary energy consumption are lost in conversion processes. Out of the 13398 PJ of primary energy consumption only 8714 PJ are available for final energy consumption. Final energy consumption is quite evenly distributed among the three sectors industry, transport and households. Only trade and services represent a minor share. Needless to say, in comparison to developing and even emerging countries the German electricity sector is very proficient and works reliably. Power outage rates rank among the lowest in the world . Currently, the installed capacity of German power plants lies in the range of 143,3 GW electrical power. This means if capacity factors were assumed to be 100% (i. e. all power plants are in use throughout the whole year) the maximum amount of electricity generation would be 1255.3 TWh/year (143,3 GW x 8760h). Clearly, this is unrealistic due to high variable costs of power plants that are specifically designed to serve intermediate and peak loads only. Additionally, power plants depending on renewable energies like wind or solar radiation cannot decide when to generate. In reality, German electricity generation amounted to 597 billions kWh (= 597 TWh) in 2009 which lies in the range of emerging countries like Brazil or India. This shows that the true value of the aggregated average capacity factor lies around 50%. Whereas nuclear, lignite and hydro power plants virtually run all the time to supply the base load, other electricity plants (such as coal and gas) only serve intermediate load. Peak load is mainly provided for by pumped-storage power plants and oil-fired power plants. To produce the abovementioned amount of electricity, fuels with an energy content of 5227 PJ were used in German power plants (~39% of primary energy consumption). Electricity generation in Germany is still based to a very large extent on coal. The generation mix in 2009 consisted of 28% from nuclear power plants, 26% from lignite, 18% from coal, 11% from gas and about 16% from renewable energies. The following diagram provides a brief overview of the situation. It should be noted that the share of renewable energies in electricity generation is considerably greater than in primary energy consumption. This can largely be attributed to the incentives created by the German Renewable Energy Law of 2000. Policy framework, laws, regulations General information concerning energy and environmental policy: In Germany, energy and environmental politics are strongly intertwined. For instance, there have been a number of regulations in the past to cut down the use of energy explicitly aimiong to reduce environmental pollution. Energy efficiency … Most prominently, the German Renewable Energy Law of 2000 aims at considerably increasing the contribution of renewable energies in the electricity generation mix. Renewable Energy Law: Energy concept 2050: The coalition treaty between CDU/CSU and FDP of 2009 lied the foundation for the recently adopted energy concept (end of September 2010) as it entailed the announcement a concept would be published in the course of 2010 formulating guidelines for a clean, reliable and affordable future energy supply based on different scenarios. Despite its high ambitions of transforming future energy supply in the direction of sustainability and efficiency largely due to enhanced employment of renewable energies there is a lot of criticism in the public debate. Nontheless, in terms of the time horizon of planning the concept can be regarded as a novelty in German energy politics because it adresses the next 40 years – roughly a power plant’s life span. The concept deals with renewable energies (A), energy efficiency (B), nuclear and fossil power plants (C), net infrastructure (D), energetic building remediation (E), mobility (F), energy research (G), energy supply in a wider context (H), acceptance and transparency (I). Renewable energies (A): At the core of the concept lies the transformation of the German energy supply sector to a low carbon economy based on renewable energies. It is recognized that Germany already sets a good example in promoting renewable energies in the electricity generation mix. As backbone of this positive development serves the Renewable Energy Law. The biggest potential for future increase in renewable power plant capacities is seen in the wind energy sector (especially offshore) and in the further promotion of biomass energy. As an incentive to invest in offshore wind energy plants the concept proposes a subsidy program of 5 billion € that should help the first ten large scale wind parks from 2011 onwards. The construction of onshore wind energy parks shall be promoted by reviewing the existing spatial planning plans and providing sufficient construction sites. To further promote renewable energies in Germany the energy concept 2050 envisages an unlimited preferential feed-in regulation for RE as in the past this served as a powerful incentive mechanism. At the same time high subsidies will be reduced in order to garuantee a market driven promotion of RE technologies that will help to keep the sector internationally competitive in the long run due to incentives for constant improvement and innovation. For this reason subsidies regarding PV have already been substantially reduced this year (2010). The potential of biogas and solid biomass to compensate for fluctuating electricity generation from PV and wind is explicitly mentioned. Therefore, the usage of biomas for heating, electricity generation and transprot should be considerably increased. Nuclear and fossil power plants (C): While fully recognizing the need for a fundamental shift in the German electricity supply mix in the future, the concept states that in the medium term nuclear power plants are still needed to avoid sharp increases in electricity prices. Therefore, an extension of nuclear power plants‘ runtimes of an average 12 years is intended. This certainly represents the most critical point of the energy concept 2050. Probably the most critical remarks in the current public debate about the energy concept 2050 concern the future use of nuclear power plants in Germany, i. e. the planned average runtime extension of 12 years. Independent research institutions, like the Wuppertal Institute for example, criticize the government’s plans of placing too much emphasis on the question of runtime extensions. This way, the institute argues, possible scenarios for a future sustainable energy supply are narrowed down to a single scenario that postulates CO2 emission reductions of up to 85% until 2050 (to the baseline of 1990) are not achievable without the extension of nuclear power plants‘ runtimes. The Wuppertal Institute states that the ambitious climate protection goals are equally achievable without extending the use of nuclear power and without the application of carbon capture and storage (CCS) technologies. Institutional set up in the electricity sector - ↑ cf. ewi/gws/prognos (2010): Studie – Energiekonzept für ein Energiekonzept der Bundesregierung, p. 257. - ↑ cf.International Energy Agency (2010): Key World Energy Statistics, pp. 48-57. - ↑ cf. Wuppertal Institut (2010): Thesen des Wuppertal Institus zum geplanten Energiekonzept der Bundesregierung, pp. 5-8. - ↑ cf. Wuppertal Institut (2010): Thesen des Wuppertal Institus zum geplanten Energiekonzept der Bundesregierung, pp. 5.